Why aren’t there 103’s on rate sheets? With 30-year mortgage rates firmly in the 7 percent range, the market has moved too fast for any kind of substantive premiums for lenders or MLOs to offer borrowers. Put another way, there aren’t any securities trading at prices like 101 or 103 that offer above par pricing that can be passed along. And with volumes continuing to decline, it will take a while for the secondary markets to catch up with the primary markets. As one fellow capital markets vet wrote to me, “I don’t even see premium pricing in the capital markets. There have been days where at best I saw par pricing on 6.5s, maybe 50 bps above. Even high-quality borrowers with FICOs above 780 and reasonable ratios need to bring money to the table. On that note, anything to add would be a nod to LLPAs in general, and the LLPAs that were handed down by the FHFA over the last year for 2nd homes and investments… With high bond coupons trading right on top of one another, anyone of those price adjustments places them around 7 percent if you want to originate anywhere close to par. You could also note correspondent investors can and will cap your execution price, so while you could originate 7.75 percent and they might even provide pricing for it, there’s no price pick up from a 7.625.” (Today’s podcast is available here and features an interview with TRUE’s Bob Noble on using AI to create accurate data that powers automation and optimizes every step of the lending lifecycle. This week’s is sponsored by SimpleNexus, the homeownership platform that 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. Click here to learn more about SimpleNexus, an nCino company.)

Lender and Broker Products, Services, and Software

We all know the market is tough for mortgage lenders right now. Did you ever think it’s equally tough on AMCs? Many are shutting their doors. Now’s the time for you to check the financial strength of your AMC partners, to make sure you’re not left holding the bag. Sure, you did due diligence when you first partnered, but a lot can change in a year. Here’s a list of questions to ask. Brought to you by Triserv, a 50-state AMC with such a strong balance sheet our lender partners are never at risk.

Home Equity Closings… in days! Calling all lenders! Looking for an end-to-end home equity solution that supports the spectrum of home equity paths and helps you close in just a few days? Look no further. Flueid’s independent, patented platform, Flueid Decision for Lenders, makes title, property, and consumer data more accessible for a predictable and seamless borrower experience. With our Lender Decision, you can quickly check title and accelerate delivery of your property reports thanks to actionable title data, clearance decisions and insights for the fastest workflow possible. The best part? It takes less than one minute. Drive higher margins, increase volumes, lower costs, and get access to never-before accessible data, instantly: That’s the Fueled by Flueid advantage. Get a Demo of our Home Equity Solution Today.

EXTRA! EXTRA! Read the latest news from Optimal Blue! Mortgage brokers using the Loansifter PPE can now automatically exchange data with integration partners. The open-source product, pricing and eligibility engine designed specifically for brokers now allows third-party integration partners to conveniently access rates from new and existing broker clients via API connections – a further testament to Optimal Blue’s ongoing commitment to an API-first strategy. Optimal Blue President Scott Happ remarked on this new functionality stating, “Technology partners can now automate access to rates without relying on manual data transfer from brokers, helping both parties increase efficiencies while avoiding errors and reducing risk. Providers now have access to thousands of brokers ready to share their rates, and brokers have an effortless connection to third parties that can help them advance their business goals.” Read more in the press release.

Lender and Vendor-Sponsored Webinars and Training

Upcoming Webinar hosted by ACUMA: “How Credit Unions Meet Compliance Requirements Head on with Reporting.” ACES Quality Management is proudly presenting at ACUMA’s upcoming Power Hour Webinar on October 27th. Hear from ACES’ award-winning industry experts, EVP of Compliance, Amanda Phillips and EVP of Operations, Sharon Reichhardt as they dive into: Fair Lending, including Redlining, Digital Redlining and Appraisal Bias, Mortgage Compliance Debrief and What to Look Out For, Foundational Reporting Must-Haves, Target Defect Rates, Gross and Net Defect Rates, Root Cause Analysis and Trending, Reporting by Regulation, and Action Plans. Register Today!

Join Chase and Black Knight, Inc® for an informative webinar! In conjunction with our $30 Billion commitment to advance racial equity, Chase Correspondent Lending created our Community Lending Program (CLP) to support our clients’ dedication to helping underserved customers and communities. Recently, we worked with Black Knight, Inc. to deliver CLP pricing automatically on eligible loans via their pricing engine. As a result, our mutual clients are now able to see the amount of CLP incentives in real time without ever leaving the Optimal Blue® PPE pricing engine. Chase and Black Knight are hosting a webinar on Wednesday, October 19 from 2:00 – 3:00 PM ET to discuss the use of geocoding capabilities in Optimal Blue to identify properties that may qualify for Chase’s Community Lending Program. Click here to register and learn how to secure the best pricing for your customers.

Clear to Close Podcast: Lender Sentiment, Market Outlook & Opportunity that Remains as Rates Reach 7 percent. As interest rates rise to levels not seen since the early 2000s, now is the perfect time to take a pulse on the market: How are lenders viewing the current conditions, what challenges will Q4 bring, and does opportunity still exist today? Tune into this new podcast episode from mortgage solutions provider Maxwell to learn what hosts Alan, Bryan, and Anthony have learned from speaking with mortgage professionals nationwide about how lenders are viewing the market, the challenges that may lie ahead in the rest of 2022 and 2023, strategy changes lenders should consider in light of recent market developments, and areas of opportunity that lenders can still unearth today. Listen to the Clear to Close podcast’s new episode on Apple Podcasts, Spotify, Google Podcasts, or your browser.

Wholesaler and TPO Updates

Yesterday the commentary noted, “Brokers doing business with Finance of America learned that the last day to register or forward lock (per-lock) a file will be Monday, October 10th. The last day to submit the full file is the following Monday, October 17th. The last day to lock the files that were not pre-locked will be on October 28th. Funding must occur by December 16th.”

I received a note from Caleb Barnhart making sure that the message was received by the industry. “Please note that Finance of America Commercial and Finance of America Reverse are not impacted by the change in Finance of America Mortgage’s wholesale business.

“… Finance of America Mortgage LLC (FAM) will no longer fund/purchase brokered or correspondent loans through its Wholesale and NDC channels, effective December 16, 2022. We realize this decision will impact your relationships. The FAM team will continue to ensure that your borrowers and you receive the same exceptional service that you have received from us over the years to ensure that your existing pipeline with us closes smoothly and on time.

“Please review and follow these important dates: October 7 by 6 PM Pacific/9 PM Eastern is the last day to submit a new floating loan or complete a new forward lock. October 28: Last day to lock loans currently in the pipeline and the last day to submit a credit package on previously locked loans. December 16: Last day to fund wholesale pipeline and last day to purchase NDC pipeline.

“Please note that loans that are in process with both Finance of America Commercial and Reverse will not be impacted by this change. Finance of America Commercial and Finance of America Reverse will continue accepting new applications and operate business as usual.”

PRMG posted TPO Resource Center Updates 22-13 which includes multiple updates and addition of various documents. Updated Correspondent Contact List (Correspondent) and Lock Policies. Training and instructional material. Jumbo, Non-QM and Second Mortgage Products. Compliance information and various Wholesale Branch Specific checklists.

AmeriHome Correspondent General Announcement 20220911-CL summarizes previously published changes made during September, additional changes made with the announcement, and recent Agency and regulatory news.

Wells Fargo Funding Newsflash C22-041 includes pricing adjuster changes and Seller Guide update information.

Disaster Updates Continue

FEMA declared federal disaster aid with individual assistance with Amendment No. 6 to DR-4673 to 1 additional Florida county affected by Hurricane Ian. See AmeriHome Mortgage Disaster Announcement 20221006-CL for inspection requirements.

Clear Capital offers FEMA disaster reporting and post disaster inspections (PDI) that put boots on the ground to assess property damage once the storm has cleared. Proven process and committed network of real estate brokers allows efficiency to turn around high volumes of reports; speed to certainty will help you manage risk effectively. If you are interested in learning more about our disaster inspections, contact sales@clearcapital.com.

Servicers helping borrowers affected by recent hurricanes may refer them to Fannie Mae’s Disaster Response Network™ (DRN) for help recovering from the broader financial, physical, and emotional impacts of the storms. Free multi-language counseling through the DRN can help your customers resume their mortgage payments sooner. View the hurricane flyers, Read the Disaster Response Network FAQs, Visit the DRN page.

Capital Markets

With investors seemingly bracing for today’s reading on consumer prices, we had a little rally yesterday in Treasuries and MBS despite a $32 billion 10-year U.S. Treasury auction meeting weak demand. Markets received a Producer Price Index for September that was higher than expected, showing producer inflation remaining at levels that will pressure profit margins and stoke concerns about negative pass-through effects to the consumer. It also invites concerns that there hasn't been enough improvement on the inflation front to convince the Fed to take a softer approach with its rate hikes. In addition to the PPI report, Minutes from the September FOMC meeting provided scant new information. The Minutes showed that the central bank’s top officials believe that taking too little action on the rate hike front would be more costly than overtightening. They are committed to raising interest rates to a restrictive level in the near term and holding them there to curb price rises, though "several" participants said that further tightening needs to take into account the risk of significant adverse effects to the economic outlook.

On the housing front, the Home Purchase Sentiment Index declined this month to its lowest level since October 2011 as consumers’ expectation that home prices will decrease matched a survey high. A higher percentage of consumers now believe home prices will decrease rather than increase over the next year. That’s a shift in survey sentiment that had previously only happened in 2011 and at the start of the pandemic in 2020. Nearly 80 percent of consumers think it’s a bad time to buy a home due to high home prices and unfavorable economic and mortgage rate conditions. Limited supply and affordability pressures continue to constrain potential homebuyers and the report signals that home sales will likely remain sluggish.

Today brings the all-important September CPI report (core +.6 percent, stronger than expected and +6.6 percent year over year, non-core +.4 percent). CPI was expected to be unchanged month-over-month, though rise 7.9 percent year-over-year versus 8.3 percent previously. We’ve also received Initial jobless claims and continued claims. Later this morning brings Freddie Mac’s Primary Mortgage Market Survey, a Treasury auction of $12 billion reopened 30-year bonds, and remarks from Atlanta Fed President Bostic. We begin the day with Agency MBS prices worse .25 and the 10-year yielding 3.97 after closing yesterday at 3.90 percent.

MLO Jobs

Real retail requires real leadership: honest, ethical, and solid as a rock. At Planet Home Lending, our leadership is award-winning. Literally. The President and CEO of the Planet Family of Companies, Mike Dubeck, was honored with his second Vanguard Award from HousingWire. Recognized for his Wall-Street-meets-Main-Street leadership, Mike’s multichannel strategy has increased Planet’s market share and made us a Top 10 Government Lender. Stability in a changing market? Check. Transparent leadership? Check. A deep product bench, data-driven marketing, and a commitment to giving back through Planet With a Purpose? Check, check, and check. It’s no wonder nearly 70 MLOs from Spokane to NYC joined us in Q3 alone. Our commitment to retail is rock solid, just like our bottom line. There’s no better time to reach out to Eastern Regional VP Kathryn Edelen (301-502-2493), Western Regional VP Lynette Hale-Lee (818-321-1260), or VP of Talent Acquisition Peter Briggs (435-709-6287). Shouldn’t you #LandAtPlanet?