Sorry the commentary is a little late this morning. I received an email from my IT department that I needed to change my username and password. It took me a few minutes to remember that I didn’t have an IT department. Beware of those phishing expeditions! Technology… if it weren’t for my pets or grandparents, I don’t know what I’d do for passwords. There are obviously pluses from technology, of course, and thank you to Steve Richman who told me about Canva, a marketing website that appears darned easy to use. How about the darker side of tech, even including today’s “joke” about how card shuffling machines can be influenced and hacked into. (Do you really think virtual Wonder Woman slot machines are random?) Thank you to those who passed along this story about the aftermath of a cyberattack on a Southern California data host for property listing information, Rapattoni Corporation, freezing up real estate transactions and valuations. (Today’s podcast can be found here and this week’s is sponsored by Richey May, a recognized leader in providing specialized advisory, audit, tax, technology and other services to the mortgage industry for almost four decades. Hear an interview with Servbank’s Sherri Higuera on how the servicing industry is investing in technology and innovation.)
Lender and Broker Software, Products, and Services
FHA proposes to eliminate face-to-face default requirements…. Driven by the success seen during the COVID-19 pandemic, HUD introduced a rule to align “electronic communication technology and mortgager engagement preferences” while eliminating loss mitigation requirements that entail face-to-face borrower engagement. Read our recent blog, “Digitizing Mortgage Default,” to find out how you can experience the future of borrower-centric communications with CLARIFIRE®. Offering a powerful servicing solution, bridging modern communication tools and borrower engagement, CLARIFIRE modernizes your servicing operations and reshapes your organization’s future. Access game-changing capabilities that incorporate personalized borrower interactions delivered through mobile process automation technologies and accessed 24/7 through a user-friendly self-serve portal. CLARIFIRE® is Truly BRIGHTER AUTOMATION®.
Mortgage lending is complex, but MeridianLink® solutions are designed to solve complex problems with powerful yet practical solutions. As consumer confidence starts to recover, today’s mortgage market remains challenging for lenders and borrowers. Between fluctuating housing affordability and inflation, growing fintech competition, and changing borrower expectations it’s easy to feel overwhelmed. That's why we’ve collaborated with Jim Deitch, certified mortgage banker, top selling author, and CEO/Founder of Teraverde®. Using our combined experience, we’ve prepared this list of six strategic tips that can help your institution reduce costs, increase efficiency, and build a sustainable, profitable mortgage lending portfolio. Learn how you can gain a competitive advantage in mortgage lending today.
NEW: Maxwell Q2 Mortgage Lending Report sheds light on rising borrower demographics and untapped opportunity in 2023’s market. Wondering how to fill your pipeline when loan volume is scarce? New data from mortgage solutions provider Maxwell gives lenders an exclusive look into the home buyers rising in today’s market: These borrowers are taking 7 percent rates head-on and creating their own paths to homeownership. Did you know, for instance, that the share of 18 to 24-year-old borrowers has increased by nearly 18 percent year-over-year? Now is the time to shift strategy to cater to these rising home buyers, both to make up for lost volume and to connect with demographics that will only continue to grow in coming years. For insight from more than $200 billion in loan volume, along with data visualizations and analysis from tenured mortgage experts, click here to download Maxwell’s Q2 Mortgage Lending Report.
Knowledge is power. HousingWire recently sat down with a roster of secondary market leaders in a series called the Secondary Market Master Class. Published through the Housing News podcast feed and on HousingWire.com, this 4-part series delivers expert-level knowledge on all things mortgage capital markets. With the help of in-house experts from Polly, as well as big names from Movement Mortgage and Primis Mortgage, the Secondary Market Master Class takes listeners through the structure of mortgage banking, how lenders can become more agile with an optimized tech stack, and the impact of innovation on the broader housing market. Enjoy the full series, here: Secondary Market Master Class.
There’s little doubt that today’s mortgage market is especially tough for brokers, with interest rates and prices stubbornly high, too few homes for sale and lots of eager competition. Still, people start families, downsize, look for vacation properties and relocate for jobs. In other words, they need to finance homes. You just need to know how to find them and how to let them know you’d like to help. But developing a marketing strategy to reach your prospects with compelling messages directed to their needs can be daunting when you’re running a mortgage business full time. To help, the Black Knight team behind the Surefire℠ CRM and Mortgage Marketing Engine has developed The Ultimate Mortgage Broker Marketing Kit, which explores how to overcome challenges through sound planning, organization and robust technology. Download your free Broker Marketing Kit.
A Hundred Million Here, a Few Billion There…
Everyone hopes that when they buy something, it is what the seller tells you that it is. That applies when a lender guarantees certain attributes to the investor buying their loans, or when a securitizer issues a pool of loans and sells that pool to insurance companies or pension funds around the world.
UBS AG will settle a lawsuit for $1.435 billion stemming from its underwriting of residential mortgage-backed securities (RMBS) in 2006 and 2007. To date, the U.S. Justice Department has collected more than $36 billion in civil penalties from entities for their alleged conduct in connection with mortgages securitized in failed RMBS leading up to the 2008 financial crisis. UBS issued a terse statement stating that it would be paying the penalty.
Meanwhile, in Agency news from the courtroom, Freddie and Fannie shareholders were awarded $612 million as it was found that the regulator of Fannie Mae and Freddie Mac improperly amended stock purchase agreements in 2012 when it allowed the U.S. Treasury to sweep up the companies’ net profits. The jury in Washington, D.C., awarded shareholders of the government sponsored enterprises the damages. Fannie Mae will pay junior preferred shareholders $299.4 million, and Freddie will pay $281.8 million. The jury also issued $31.4 million to owners of Freddie’s common shares.
Training, Webinars, and Events This Week
Register for an in-depth discussion today with Private Eyes CEO, Sandra James, on the importance of background checks in today's hiring landscape, August 15, at 8:30 am PT webinar.
There is a lot of focus on rapidly increasing GSE buyback volume & the potential cost: Blue Water has a solution whether you are manufacturing loans or buying loans or MSR. Please join Blue Water Financial Technologies Services, LLC (“Blue Water”) for a Smart Diligence Webinar hosted by The Mortgage Collaborative (TMC) today.
Also today is Mortgages with Millennials with Kristin Messerli and Robbie Chrisman, and sponsored by National MI, today’s guest being down payment expert Rob Chrane. Tune in every Tuesday at 10AM PT to the weekly video show designed to empower mortgage professionals to tap into the millennial market. This show demystifies the psychology of first-time homebuyers and offers strategies to win more market share with a key segment of the market. Sign up for a weekly reminder with the link to join and a sneak peek into the next episode.
Don’t miss the MMA’s Triple Crown Event. On Wednesday, August 16th enjoy a full day of speakers and breakouts, with keynote speaker Kristin Messerli. Stay for the after-party with LIVE horse racing just after the conference with the MMA.
James Brody, who was named Senior Litigation Partner in the wake of his merger with Garris Horn, LLP, will be co-hosting a webinar with The Mortgage Collaborative (“TMC”) at 10:00 AM PST, on August 17, titled: “Repurchase Defense Roundup: Proven Strategies to Help Lenders Fight Repurchase Demands and Pursue Culpable Third Parties.” Both Mr. Brody and his colleague, Ingrid Petersen, look forward to educating attendees on a number of invaluable strategies that will help them more effectively fight repurchase demands and improve their chances of being made whole whenever a lender is not able to successfully dispute a claim because of bad facts and/or needs to preserve a business relationship.
Looking for more in-depth commentary on weekly mortgage news? Register here for "Mortgage Matters: The Weekly Roundup with Robbie and Rob Chrisman" presented by Lenders One. Every Wednesday at 2:00 PM EST/11:00 AM PT Robbie and Rob will dive into a range of mortgage-related topics, including market trends, interest rate fluctuations, innovative mortgage products, and industry advancements. Tomorrow’s show features Hubzu’s SVP Travis Britsch on connecting proper buyers and sellers.
For some good economist’s perspectives, and one capital markets guy’s, tune in to “Unparalleled Insights into Trends and Bold Predictions” with Selma Hepp (CoreLogic’s Chief Economist), Michael Fratantoni (MBA’s chief economist), and Rob Chrisman” on Wednesday August 16th at 1PM ET/10AM PT, sponsored by TrustEngine.
Orrick webinar series, ConFi Today: What’s Around the Corner in Consumer Financial Services Enforcement. Inaugural session, Should You Be Losing Sleep Over Regulation E? Enforcement Issues, Payments and Deposits, will discuss current issues and enforcement trends impacting payments and deposits. August 16, 11:30 am–12:30 pm PT.
August 17-20 will be Originator Connect, the nation's largest LO conference. A huge exhibit floor and tons of sessions that will help loan originators bulk up their pipeline, it's also got special events such as The Non-QM Summit and the Private Lender Forum. Looking to start your own brokerage? There's an entire half day Build-A-Broker program. And attendees can also get their federal NMLS license renewal class done while you're there. It's all free to NMLS-licensees and their support staff. Just go here and register using the code CHRISMANFREE. And if you want to know what's coming your way, don't miss keynote speaker Lawrence Yun, the chief economist for the National Association of Realtors.
Register for MBA/MW webinar, Avoid Compliance Pitfalls, Thursday, August 17, 10:00 AM EDT. Mitch Kider will discuss the current regulatory environment and hot topics in mortgage industry compliance, including fair lending, UDAAP, loan originator compensation, and recent activity by the CFPB and other regulators.
Friday the 18th at 3PM ET is the next edition of The Mortgage Collaborative’s Rundown with Melissa Langdale and me. We’ll will be covering current events in the mortgage market for 30 minutes starting at noon PT in “The Rundown”.
Capital Markets
Mortgage rates are not the same as the yield on the U.S. risk-free Treasury, but we do use it as a “benchmark.” (Mortgages have prepayment and credit risk.) The benchmark is yielding 4.27, a new high for 2023 for the 10-year yield. And the 2-year is yielding 5.02. Have the Federal Reserve’s actions had the desired impact on the economy? It is certainly a debate.
With little in the way of economic data to open the week, investors looked ahead to Thursday’s release of the July Federal Open Market Committee Meeting Minutes for clues on the Fed’s next move. Some recent Federal Reserve officials’ remarks point toward the FOMC refraining from softening policy in the near-term. Prior to the release of the Minutes, pricing in fed funds futures markets implies the FOMC is likely to pause in September, while the probability of another 25 basis points hike in November is around one-in-three. This week doesn’t have much in the way of market-moving data, however we will get housing starts, retail sales and the index of leading indicators.
Inflation data released over the last week continued to show elevated, yet easing, prices. Consumer prices were up 3.2 percent over the last twelve months while core CPI increased 4.7 percent over the same period. Shelter costs rose at a slower pace while prices for services saw a modest increase. No doubt, there is still inflationary pressure in certain sectors of the economy.
Meanwhile, producer prices rose a touch more than analysts’ expectations with core PPI up 0.2 percent for the month and 2.7 percent over the last twelve. Like consumer prices, the cost of services saw the largest gains. Expectations for inflation remain higher than prior to the pandemic according to the University of Michigan’s consumer survey in which the year-ahead inflation expectation was 3.3 percent. From 2017 to 2019, the survey respondents averaged from 2.3 percent to 2.6 percent. Ultimately, price pressures remain and there hasn’t been any data to suggest the Fed will change its current stance on monetary policy.
Today’s economic calendar is under way with retail sales +.7 percent, much stronger than the expected +.4 percent. Empire manufacturing and import / export prices were also released, but the focus is on retail sales. Later today brings Redbook same store sales, June business inventories, the NAHB Housing Market Index for August, and remarks from Minneapolis Fed President Kashkari. We begin the day with Agency MBS prices worse .125-.250 and the 10-year yielding 4.27 after closing yesterday at 4.18 percent after the retail sales figures.
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