4.19.22 Rising Mortgage Rates and Bond Prices

Thanks to Candor, AI that puts your underwriting on autopilot.

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As the nation ruminates on the court ruling on the mandatory mask mandate, remember, “You do not need a parachute to skydive. You only need a parachute to skydive twice.” It is a safe bet that the Federal Reserve will raise short term rates more than twice before summer. This month’s STRATMOR blog is titled, “A Primer on the Federal Reserve and Mortgage Rates.” Here in Atlanta, in the MBA-STRATMOR Peer Group Roundtable meetings, much of the conversation revolves around interest rates, as one can imagine. The Federal Reserve is going to have a hard time bringing down inflation without triggering a recession, according to Goldman Sachs Group who believes that there is about a 35 percent chance the U.S. will fall into a recession over the next two years. Another topic is the population migrating due to tax reasons. Property taxes aren’t good, but fall into the “interesting” category as some states’ taxes have been rising while others are stagnant, and most have not been matching the rise in property values. And economist Dr. Elliot Eisenberg’s team calculated the highest and lowest tax burdens (the proportion of personal income paid towards state and local taxes, listed by percentages) in the U.S. “NY has the highest burden at 12.75, followed by HI at 12.7, ME at 11.4, VT at 11.1, and MN at 10.2. At the low end, FL is 45th at 6.6, NH follows at 6.4, then WY at 6.3, DE at 6.2, TN 5.7, and AK at 5.1.” (The audio version of the commentary is available here and this week’s is sponsored by Candor, AI that puts your underwriting on autopilot.)

Jobs & new hires

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Angel Oak Mortgage Solutions, the leading non-QM lender has added to its already amazing team of Account Executives due to the increasing demand for non-QM and company growth. The company recently welcomed the following six experts to the Angel Oak family: Jacob Kennedy in Portland, Oregon, Tiffanie Alavezos and Timothy Hagoodboth in San Diego, Kimberly Allbrittonin in Baton Rouge, Grady Cash in Tulsa, and Vanessa Schillt supporting the Raleigh area. They are excited and ready to help originators with quick and easy solutions using non-QM. And Angel Oak is continuing to look for operations staff as well as account executives to deliver unparalleled service to brokers and correspondents nationwide. See JoinAngelOak.com for information on how to join the leader in non-QM.

Lender & broker software and services

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Last year, advertisers spent a whopping $545 MILLION on Super Bowl commercial slots. While you may not have the budget to advertise during the Super Bowl, you still need to compete with those who do. For marketing tactics that will help you compete with the big spenders, join representatives from NAMB and Surefire by Black Knight on April 20 at 2 pm ET for an informative mortgage marketing webinar with a behind-the-scenes look at a day in the life of top-producing brokers. Register for the free webinar and check out Surefire’s latest eBook on “A Day in the Life of a Mortgage Broker” for proven tools and strategies that will create more space in your day to win leads and earn referrals.

Research suggests that it takes less than a second to make a first impression. While Sales Boomerang may be the newest member of the LendersOne community, it has already earned a distinguished reputation in the world of mortgage lending. Find out why more than 170 IMBs, banks and credit unions rely on Sales Boomerang’s automated borrower intelligence alerts to retain more borrowers and maximize revenue on April 28 at 2 pm ET during a free webinar hosted by Alex Kutsishin and Richard Grieser. To sweeten the deal, Sales Boomerang will send a free t-shirt and Starbucks gift card to any attendees that want to learn more about its award-winning alert offerings. Register today to meet the new kid on the block at LendersOne!

The industry data is piling up and it is now clear that marketing automation is the killer app for the purchase money mortgage market. Loan officers just don’t have the time or training to nurture home buyers through the longer process. The good news is that when good marketing automation is employed, the results appear quickly. Multiple studies, performed by lenders and independent researchers, show that the Smart CRM from Usherpa with built in marketing automation and content library will double the average loan officer’s close loan volume. Doubt it? Get the data by calling Usherpa today at 303-740-5710 or email info@usherpa.com.

Cloud-based LoanMAPS, a fully integrated digital processing and underwriting system, will eliminate your need for a POS, a LOS, a CRM, report writer, and income calculator. Do you know your costs of your full-time employee? Does your Fintech truly improve their work process and reduce your cost to produce? LoanMAPS does. With LoanMAPS you can have confidence you will start the loan with an agency compliant AUS underwrite, and our workflow will have entry level mortgage bankers closing in no time! “LoanMAPS is not about replacing people, it is about using technology to its fullest potential so that your employees can reach theirs.” Take3Tech! In conjunction with our partner DocMagic, users can finish closing documents in 15 minutes. See more about how you can reduce your cost to close with the LoanMAPS Closing Module! See all the time and cost saving features of LoanMAPS by requesting a demo today.

“We get to Conditional Approval 14 days faster,” Travis Rulle, COO, FBC Mortgage. At 1 bps per day, these Candor clients add massive margin to every loan. For a bullet proof underwrite whiplash fast they use Candor’s Loan Engineering System. “We’ve cut our cycle time in half,” Kenny Parkhurst, COO Get A Rate. The Machine as an Underwriter conducts: OCR, 1100 data crosschecks, income calculation, information scrutiny, condition generation & condition clearing. It renders decisions and backs each one with a warranty. How much profit could a faster manufacturing process Do the math. You can be a raving client in just 30 days. Schedule a demo.

Looking for a powerful competitive advantage tailored to 2022’s challenging market? Maxwell gives local lenders the mortgage solutions they need to improve efficiency, save costs, and empower their teams in both the front and back office. Using leading technology, Maxwell Point of Sale combats shrinking margins by closing loans over 13 days faster and saving 21 BPS in costs per loan. Plus, with LOs on Maxwell closing 15 percent more loans per month, lenders can attract and retain top talent despite fierce competition. Meanwhile, on the back end, Maxwell Processor Edge uses workflow technology to reduce underwriting touches and unlock next-level processor productivity, resulting in 15 percent more loans worked per processor per month. Want to arm your lending team and operations with comprehensive solutions designed for today’s market? Schedule a demo with Maxwell to learn more.

“Leverage out-of-the-box, cutting-edge, proven technology that’s fully customizable and deployed in weeks with Richey May’s RM Analyze. Business intelligence designed by and for mortgage industry experts, our platform consolidates data from every department and every piece of software you use. Need to know which loan officers are converting applications to funded loans? Get the answers in one click, plus intuitively drill down to all the details you need. Curious how you’re measuring up against your peers? Use our Peer View Ops functionality. With RM Analyze, you get a complete picture of your company and the tools to empower your managers to take proactive measures, find efficiencies, create change, and drive growth. Contact us today for a walk-through and custom implementation plan.”

Training & education

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XINNIX is excited to offer our readers two new resources on today’s hottest topics at no charge! First, is the recording of last week’s event: “Winning Strategies for Rate Shoppers in 2022.” Hundreds of mortgage professionals attended the session live, and in a post-event survey, 99.9 percent said they would highly recommend this training to their colleagues. You can access the recording here and share it with your team today. Mortgage professionals will walk away with tangible tips and strategies on how to handle today’s rate-shopping conversation. Second, earlier this month, on their podcast, Inside the Mortgage Mind, XINNIX Founder & CEO, Casey Cunningham spoke with Leo Anzoleaga, Founder of Leo’s Circle and SVP of Residential Lending at Draper & Kramer Mortgage Corporation, about today's importance of educating customers and mastering your trade as a mortgage professional. Listen to the full episode here and be sure to subscribe for more!

Launch Org Compliance Training and MLOs bank those hours toward CE. MortgageEducation.com is redefining compliance and NMLS Training. All progress is tracked, certs stored in your Corporate Portal. Our solutions ease the tracking strain and save Compliance Team sanity, plus save MLOs TIME. New MLOs? MortgageACE is the most comprehensive test prep with FEEDBACK to your team to determine the student’s ability to pass the NST Contact Dave Olchek on Platinum Modular CE. Always use a vetted NMLS Provider. Testimonials.

Servicing services

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Ready to experience next-level service? The TMS Subservicing and Correspondent teams will be at the MBA Secondary Conference in NYC May 16-17. Schedule a meeting to find out how TMS Subservicing is able to achieve a 98 percent customer satisfaction rate, 91 percent first-call resolution rate, 83 percent Net Prompter Score, and <1 min wait times. Learn how TMS CAREspondent can help close more loans with their agency style direct credit box and full suite of renovation products, leverage builder business with their extended lock program up to 180 days, and more. Along with TMS’ award-winning platform SIME (Servicing Intelligence Made Easy), the fully transparent, real-time technology that gives you total surveillance of your portfolio, it’s the triumphant combo that makes TMS a Top 10 Subservicer and Top 15 Buyer. To find out how TMS can grow happiness for you and your customers, contact TMS Subservicing or TMS CAREspondent.

“Your Mortgage Servicing Partner Is Ready for This Moment and The Next. Meeting homeowners’ needs presents challenges unseen in our industry till today. Time-tested and with a ready-for-anything approach, Cenlar is uniquely prepared to handle the mortgage servicing challenges of our clients and their homeowners for 2022 and beyond. We are a financially strong, wholesale bank, delivering solutions to our clients and their homeowners that lead in quality, innovation, and flexibility. Cenlar does not participate in retail lending or take retail deposits so as not to compete with our clients… Mortgage servicing is everything we do. Let’s discuss how Cenlar can meet and exceed the mortgage servicing needs of your organization. Call 1-888-SUBSERV or visit www.Cenlar.com. We want to be your trusted partner, each and every day.”

Non-QM, NQM, DPA, non-Agency…

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Potential homebuyers are getting discouraged by rising mortgage rates and home prices, according to a survey released on Monday by the New York Federal Reserve. U.S. consumers expect mortgage rates to increase substantially over the next several years, with households on average projecting rates of 6.7 percent a year from now and 8.2 percent in three years, the survey shows. Lenders are turning to alternative products as a way to a) help their market share, and b) help their clients.

Yesterday Arch Global Mortgage Group announced the expansion of Arch Mortgage Funding, Inc. (AMF) to include products for the Non-Qualified-Mortgage (NQM) market to support lenders seeking to partner for NQM loan sales. By purchasing Jumbo and now NQM closed loans, AMF brings the non-Agency market an alternative, stable liquidity source. “AMF products provide coverage for a wide range of alternatives, including loan amounts from $150,000 to $3 million, under prime, express and expanded underwriting guidelines.” Also within AMF’s expanded underwriting program are alternative income-qualifying tools, including Bank Statement, Asset Depletion and Debt Service Coverage Ratio.

Kim Schenck, Correspondent Sales Manager with Essex Mortgage, writes, “Essex offers a down payment assistance program that is currently paying premium of 102.659 and it’s simple: 100 percent Delegated, 100 percent Financing (96.5 percent 1st, 3.5 percent 2nd), FHA Guidelines for 48 States (No WA or NY), Min score 600, 160 percent AMI, TPO okay, No 1st Time Homebuyer Requirement, DTI per AUS, and funding turn-time of 3-4 days.”

The loanDepot Conventional Lending Guide received multiple updates. Additionally, the jumbo Advantage EXPRESS Matrix and Lending Guide were updated. Read loanDepot’s LDW WNTW 3-21-22 for details. Yes, it expanded its jumbo Advantage EXPRESS – FLEX. Find out details in LDW’s WNTW Edition 04_04_22. Also, don’t miss loanDepot’s Key Dates Calendar for the month of April.

Wells Fargo Funding expanded its rental income policy for Non-Conforming Loans by eliminating the additional requirements that applied if the borrower’s tax returns were aged nine months or more from the date of the last tax year filed. Refer to the Seller Guide sections listed in Wells Fargo Funding Newsflash C22-009nc for complete rental income requirements. In addition, the following topics are also covered policy expansion for Non-Conforming Loans regarding Stock issued by privately held company. Non-Conforming Loan enhancements to LTV/CLTVs greater than 80 percent and expanded policy regarding adverse credit requirements.

Wells Fargo Funding expanded its Non-Conforming policy, as described in Newsflash C22-008nc, allowing alternative final inspection documentation when the appraisal is made subject to repairs or subject to completion per plans and specs. Also noted in Wells Fargo Funding Newsflash C22-008nc the Newsflash, Wells Fargo Funding will require 2021 tax transcripts will be required for Non-Conforming Loans closed on and after June 20.

Redwood Trust announced that its residential mortgage banking platform, Redwood Residential, launched a new expanded product offerings through its Choice program geared towards addressing the growing cohort of self-employed borrowers. Loans for self-employed borrowers will be uniquely structured to meet the Consumer Financial Protection Bureau’s (“CFPB”) Qualified Mortgage (“QM”) definition.

First Community Mortgage Wholesale updated guidelines spanning multiple topics applicable to Non-Conforming Jumbo, Choice QM/Select 90, Select QM/Select AUS. Information is posted in FCM Wholesale Announcement 2022-17.

PRMG announced its Sapphire Jumbo Product is available to wholesale and correspondent channels. Product highlights and a comparison of the benefits of Sapphire vs. Ruby is posted in PRMG Product Update 22-16.

First Community Mortgage Wholesale revised its Direct/Traditional Jumbo guidelines posted in FCM Wholesale Announcement 20221-14 and Correspondent Announcement 2022-11.

Topics updated include Credit-Housing Payment History, Loan Purpose, and COVID-19 related. Credit-Housing Payment History, Credit-Significant Derogatory Credit Events, Loan Purpose-Delayed Financing Exception. Update details for Direct and Traditional guidelines are posted in FCM Wholesale Knowledge Center and FCM Correspondent Knowledge Center.

Arc Home LLC is now offering its proprietary Access Non-QM and Elite QM Non-Agency products to top producing Delegated Correspondents. Designed to meet the needs of a changing residential finance market, the Arc Home Elite product suite provides attractive options for high-quality borrowers who fall outside the parameters of a traditional jumbo product or require alternative income documentation options. The Arc Access Suite includes Non-QM features and offers products such as 12–24-month bank statements, DSCR, Agency Plus and Clean Slate options.

Mountain West Financial Wholesale posted that all Non-QM SP loans must be in approved status in order to lock the loan.

Capital markets

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As the world's central banks move to push interest rates higher to fight inflation, the global value of negative-yielding debt has fallen by $11 billion. Bond prices are plummeting, and now bonds trading with negative yields have fallen to the lowest level since 2015.

Without much new information to open the week, bonds picked up where they left off last week and the sell-off continued. The NAHB Housing Market Index fell in April, as expected, while MBA’s monthly Loan Monitoring Survey revealed that the total number of loans now in forbearance decreased to 1.05 percent of servicers’ portfolio volume in the prior month at the end of March. According to MBA’s estimate, representing 73 percent of the first-mortgage servicing market (36.4 million loans), 525k homeowners are in forbearance plans.

Today’s calendar is under way with housing starts and building permits for March (+.3 percent – 1.793 million, and 1.873 million respectively; expectations were for groundbreaking on new homes to drop to an annual rate of 1.745M, while permits were seen edging down to 1.825M). Later this morning brings Redbook same store sales for the week ending April 16, remarks from Chicago Fed President Evans and Minneapolis Fed President Kashkari. The Desk of the NY Fed will conduct just one MBS purchase operation that will target up to $545 million UMBS15 2.5 percent and 3 percent. Versus Monday we begin the day with Agency MBS prices worse .250 and the 10-year yielding 2.89 after yesterday’s 2.86 percent.