When I see lover’s names carved into the wood on a tree, I don’t think it’s sweet. I just think how surprising it is how many people bring a knife on a date. Time passes, life goes by fast, first dates turn into long-term relationships, a hot summer has been forgotten, turned into a beautiful autumn, and turned into an arctic winter. Time has passed, and it is nearly Christmas Eve. Ya’ll sick of Christmas carols (again)? The Winter Solstice has occurred, meaning that the minutes of daylight will only increase for the next six months in the northern hemisphere. People are planning for 2023, as if the calendar changing from December to January will have an impact on rates, volumes, margins, or revenue. Augie Del Rio with Gallus Insights did a video interview with Tammy Richards and me about how lenders and vendors are reacting to the end of 2022 and the beginning of 2023. (Gallus Insights helps lenders make data-driven decisions.) And before we know it, Wi-Fi will be free on airlines… Just ask Delta. (Today’s podcast is sponsored by Richey May, a recognized leader in providing specialized advisory, audit, tax, technology, and other services in the mortgage industry and in banking. Listen to an interview with Ally Home’s Glenn Brunker on the current environment and how originators are coping.)

Lender and Broker Software, Products and Services

Strength. Stability. Deep know-how that comes from navigating 35 years of all kinds of markets. That’s what Flagstar Bank brings to the table. Nearly $90 billion in assets. Vast experience in all four mortgage-channels. A comprehensive product offering including the recently rolled-out Advantage Plus, with expanded eligibility guidelines including a minimum credit score of 660 and DTI to 55%, and which also allows full and limited documentation including asset depletion. So, whatever your business initiative, know this: for 35 years Flagstar Bank has delivered in challenging markets. And they’ll deliver in this one. Don’t settle for second best, especially in a market this challenging. Choose Flagstar. Visit us or reach out to John Gibson.

Do you know your 1004 from your 1073, 1025, or even your 2075 or 2090? Even seasoned mortgage lenders may need a reminder course on Appraisal Forms from time to time. There are major forms, add-on forms, and multi-purpose forms. Here’s a quick reference guide: Know Your Forms. Brought to you by Triserv, a 50-state AMC that has client-specific, dedicated teams on both coasts offering high-touch, personalized service. To find out more, contact Triserv Appraisal Management Solutions.

“Are you wondering where you stand in comparison to your peers? Are they faring better or worse than you in this challenging environment? Richey May’s RM Analyze + Peer View Ops allows you to dive deeper and see how you’re performing in vital production and operational areas in comparison to your peers in real time. View data for any time period to really drill into where and when you excelled or lagged, so you know where the opportunities are. Our RM Analyze Services empower your team with actionable insights; our services are designed and implemented by mortgage industry experts to quickly set you up with critical reports you need to run your business. What more could you want on your Christmas list? Contact us today and we will walk you through the platform and set a plan for how you can solve your specific challenges with actionable insights.”

Mortgage Industry Mergers

STRATMOR’s M&A practice is on fire as big lenders have become small lenders, or brokers, and culturally paired lenders are wondering, “Why have two accounting teams? Two capital markets groups? Two underwriting staffs?” And so on. (Anyone interested in learning more should talk to David Hrobon or Garth Graham.) Of course, as has been mentioned in this commentary, larger lenders are also adept at simply hiring production staff away from smaller, thinly capitalized lenders.

And it helps to know the players. For example, there are 2 AmeriFirst’s: Amerifirst Financial out of Arizona and Amerifirst Mortgage out of Michigan. Yesterday Union Home Mortgage (UHM), a full-service retail, wholesale, and consumer direct independent mortgage banking company, announced its acquisition of Kalamazoo-based Amerifirst Home Mortgage.

Amerifirst was founded in 1983 by Mark Jones and David Gahm. The company has grown from a single branch in Kalamazoo, Michigan to more than 300 licensed loan consultants across the country with concentrations in Florida, Michigan, Ohio, North Carolina, and California. UHM is a nationally recognized top 50 mortgage lender with more than $13 billion in responsible lending each year. Amerifirst will add to this total; the company originated $2.8 billion in 2021and $3.3 billion in 2020. And there is heft: UHM has been the top-ranked USDA home lender in its home state of Ohio for three straight years. Amerifirst is the number one ranked lender in Michigan.

loanDepot VS CrossCountry

Yesterday news made the rounds that loanDepot ("LDI") (NYSE: LDI), in the United States District Court for the Northern District of Illinois (the “Court”) was granted a preliminary injunction against CrossCountry Mortgage, LLC and six former loanDepot employees now employed by CrossCountry (the “Defendants”). It was viewed as a legal victory for loanDepot.

“The Court found ‘there is a likelihood of success on all of loanDepot’s claims against the Defendants,’ including its claims that CrossCountry and the six former LDI employees misappropriated loanDepot trade secrets, that CrossCountry aided and abetted contractual and fiduciary violations by these recent hires, and that CrossCountry was responsible for tortious interference with the former employees’ contracts with loanDepot. The Court enjoined CrossCountry and the individuals from, among other things, accessing, using, or reproducing numerous loanDepot documents and data that Defendants improperly acquired. The Court further enjoined these individuals and anyone acting in concert with them, including CrossCountry, from contacting or soliciting numerous loanDepot customers as described in its order.”

Investor News: Conforming, Non-Agency

As a cold storm hits a chunk of the nation, and thousands of flights are already cancelled, lenders and servicers are still dealing with previous disasters.

SunWest Mortgage posted Florida Hurricane Nicole, DR-4680-FL, updates to counties declared by FEMA as Major Disaster Areas on December 13, 2022, for Incident Period Date: 11/07/2022 - 11/30/2022. SWMC partners can access the Sun West Seller Guide under the HELP section in sunsoft.

On 12/13/2022, with DR-4680, FEMA declared federal disaster aid with individual assistance has been made available to 6 Florida counties affected by Hurricane Nicole from 11/7/2022, to 11/30/2022. See AmeriHome Mortgage 20221203-CL Disaster Announcement for inspection requirements.

In non-disaster news, conventional conforming (aka, GSE, Fannie, Freddie) news continues, important to most lenders since the lion’s share of business goes through this channel.

FHFA published 2022 Third-Quarter Uniform Appraisal Dataset (UAD) Aggregate Statistics.

FHFA Finalized 2023-2024 Multifamily Housing Goals for Fannie Mae and Freddie Mac.

Fannie Mae posted December Selling Guide Updates in Announcement SEL-2022-10

Fannie Mae Lender Letter LL-2021-12 provides advance notice of upcoming changes to Fannie Mae Master Servicing processes and systems. These changes further simplify and streamline servicer reporting and will be introduced in a phased approach. These changes are not applicable to reverse mortgage loans.

Citi Correspondent Lending posted Bulletin 2022-15 containing multiple credit policy updates Including documentation requirements for alimony/separate maintenance and child support income, borrowers with business ownership interest less than 25%, documentation options for Social Security income, Hazard Insurance coverage for Co-Op properties and private flood insurances. Also, notices regarding the Correspondent Lending Portal, depreciating markets list plus additional clarifications.

In conjunction with eligibility of conventional Conforming Loans at the 2023 loan limits, Wells Fargo Funding is updating its minimum first loan amount policy for Non-Conforming Loans, effective December 16, 2022. View Wells Fargo Funding Newsflash C22-028nc for details.

In Newsflash C22-052, Wells Fargo Funding announced the removal of adjuster improvements for certain high balance loans, effective December 16, 2022. Also, Correspondent sellers approved for Non-Conforming loans should view Newsflash C22-029nc regarding housing and parsonage allowance/income.

FAMC/Citizens Correspondent National Bulletin 2022-22 includes information on Conventional Conforming & FHA Products, FORM 4506-C and Reminders. Please see the bulletin for additional information and all lock, delivery and purchase by dates, if required.

PRMG issued Product Update 22-71: Product Profile Updates revising information regarding standard and high balance loan limits updated to reflect 2023 limits.

Pennymac will update Conventional & Government LLPAs effective for all Best Effort Commitments taken on or after Friday, December 09, 2022. View announcement 22-78 - Updates to Conventional & Government LLPAs for details.

Effective with AmeriHome Mortgage announcement 20221206-CL, a new temporary buydown calculator is now available as a tool to assist Sellers.

Fifth Third Correspondent Lending Communiqué Edition 2022-10 includes information on the following topics: Fifth Third LendingSpace Portal Availability, First Time Homebuyer LLPA Waiver on Agency Products and 2023 Loan Limit Changes.

There’s been an update for CBC Mortgage Agency's FHA correspondent clients about streamlining its correspondent lending guide by clarifying the requirements and guidelines for loan submissions, resulting in a more efficient and smooth process for both lenders and borrowers? Here is the update:

FHFA new loan limits on Conforming and High Balance Conventional loans, effective on January 1, 2023, will allow your borrowers to finance a higher percentage of the purchase price, making it possible to buy a more expensive home. A&D Mortgage is committed to providing borrowers with the best possible mortgage products and services. We are proud to offer your customers the opportunity to take advantage of these new industry-leading loan limits.

To meet the evolving needs of its partners and their borrowers, A&D Mortgage released product updates for newly submitted loans in effect on December 16th. A&D will now allow investment loans for 5-to-8 multi-family and 2-to-8 mixed-use units. Other updates include changes to cash-out seasoning requirements, allowance of WVOE Bonus, Commission, and Overtime, and waiving of Condo project reviews that are either detached condos or in 2-4 unit condo projects.

Capital markets: Quiet Holiday Trading

U.S. Treasuries, and along with them MBS prices, received a boost from yesterday's $12 billion 20-year bond auction meeting strong demand, though there was little market-moving news on the day. The Conference Board's Consumer Confidence Index took a surprising turn for the better in December, driven by improved views of the economy and jobs, as well as declining gas prices. Existing home sales decreased 7.7 percent month-over-month in November to a seasonally adjusted annual rate of 4.09 million, the tenth straight month that existing home sales have fallen. Total sales in November were down 35.4 percent from a year ago.

Today’s economic calendar is quiet, though we have received old news in the form of the third estimate of Q3 GDP, expected to register at 2.9 percent, but the attention was on core PCE being revised higher to 4.4 percent. Separately, weekly jobless claims came in at 216k, continuing claims steady: the strong labor market continues. We begin the day with Agency MBS prices roughly unchanged from Wednesday afternoon and the 10-year yielding 3.67 after closing yesterday at 3.68 percent.

Employment

“Are you an experienced Wholesale Account Executive excited about innovation and the prospect of being a part of something special? Then Emporium TPO is ready to meet you! We’re looking for talented people to join our growing sales team. Our experienced leadership and collaborative culture allow you to focus on serving mortgage brokers and shaping your professional future. Emporium TPO is the result of more than 65 years of industry experience combined with a vision to build the future of third-party origination. Our founders have the proven ability to build and grow a business to a national scale while maintaining a collaborative culture. We’re a transformational mortgage lender that delivers high-quality products for our partners and meaningful careers for our employees. Apply on our website or send your confidential resume here.”

“Churchill Mortgage announced Kisha Weir joined as SVP of Sales for the Pacific Northwest region, responsible for overall sales operations while overseeing training, mentorship and development of loan officers across the division. With over 30 years of experience in the industry, Weir has garnered impressive credentials in key senior roles and improving processes and efficiencies. ‘In addition to being a natural servant leader with a proven track record of developing profitable sales teams, Kisha has an undeniable desire to invest in people,’ said Kevin J. Hanna, president of the Churchill Mortgage PNW. During these uncertain times, we’re confident in our future. Churchill Mortgage, a debt-free company of over 30 years, has a sound leadership team and is an E.S.O.P! With employees as owners, we’re a company of leaders. Our owners are laser-focused on the success of our company & our customers. If this type of environment and mentality interests you, learn more about us here. We would love to speak with you about opportunities in your area.”

“Thrive Mortgage did it again! Despite the challenges in our industry, we have remained financially strong, nimble, determined, innovative, and committed to our purpose. These traits enable Thrive Mortgage to have the best model in any market condition for both our colleagues and our clients. Reflecting on 2022, we are so proud to have attracted so many new regional and local teams from all across the country, while also completing the acquisition of AMSCo (American Mortgage Service Company) in 90 days. We are so proud of those that have been with us over the last twenty-plus years. Our confidence remains strong because of the heart of our amazing community who thrives together and continues to be a driving force for moving our industry forward. We wish all our families, partners, and fellow servant-leaders in the industry a very Merry Christmas and Happy New Year! We would love the opportunity to share our story with you!”