Thanks to Candor, AI that puts your underwriting on autopilot.
“Two silkworms had a race. They ended up in a tie.” There aren’t a lot of ties of either kind in mortgage banking, but there is plenty going on. Mortgage rates are the highest they’ve been in ten years, and expected to gradually move higher. If we are back to 2018 production levels, are your costs back to those levels? Not only must lenders grapple with trying to stay ahead of the market with cutting costs, but the legal landscape continues to change. While most homeowners associations refrain from the “last resort” of foreclosing on residents, some HOAs in Colorado communities have moved time and again to take members’ homes. And Al W. sent this note about Chattanooga, Tennessee, possibly putting a moratorium on short term rentals, suggesting that perhaps it has some kind of impact on cash buyers shorting housing inventory. Plenty of lenders have created reverse mortgage divisions (why not, with 10,000 people a day turning 62). Those originators are bending over backward to avoid elder abuse, unfortunately, per the FBI, on the rise in places like Colorado. (There’s no abuse in Robbie Chrisman’s daily podcast: 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
PacRes Mortgage, formerly Pacific Residential Mortgage is excited to announce the hiring of Dean Goold as Branch Manager of its new Stockton, CA location. “As we continue our rapid expansion across the U.S., we’re thrilled to welcome such an experienced and knowledgeable Central Valley financial leader as Dean. ‘I joined The Pac because of our shared commitment to putting the client’s need first by providing a customized loan that best fits their needs, all offered within a 5-star experience,’ said Dean. ‘I am excited to be a part of this growing national team where every employee has a voice to make the company a better place!’ If you want to build your entrepreneurial dream, join Dean and the uniqueness of a ‘national boutique’ company that has all the resources of a large corporation without any of the corporate bureaucracy. Please contact Jeff Strode, CXO at 503-805-0991.”
“As a National Top 15 Mortgage Lender, we routinely create opportunities for leaders and winners. Currently, we are seeking nationwide Sales Managers and experienced Loan Officers who want to become Sales Managers. Applicants must be energetic, ambitious, motivated, reliable, driven, persistent and consistent. Our go-getter candidates must ideally produce a minimum of $500K in monthly sales and manage at least one LO. We have a dedicated team of experienced management professionals who provide recruiting, marketing, sales, and operations support. Take advantage of our industry-leading One-Time Close Construction Loan program, which is available for all product types, including Conventional, FHA, VA, USDA, and Jumbo. This is your chance to achieve great success. In an industry filled with stress and pressure, we are looking for diamonds. Period. If interested in a confidential discussion, please send your resume to Chrisman LLC’s Anjelica Nixt.”
“As Sierra Pacific Mortgage (SPM) celebrates our 36th year in the industry, we are determined to continue our legacy of delivering superior service for our borrowers and third-party originators. While competitors have struggled to keep their doors open and meet the demands of the purchase market, Sierra Pacific’s team has continued to grow. We have sought quality over quantity talent that aligns with our ‘Do the Right Thing – Always’ mindset, and we are not done yet! We are looking to bring additional talent on board and are interested to hear from you if you are a highly motivated, hardworking individual who possess the highest levels of integrity and grit to get stuff done. If you are interested in working for, or partnering with, a company designed to help you stand out and succeed, contact Careers@spmc.com to discuss next steps.”
Benjamin Franklin said, “When you’re finished changing, you’re finished.” It’s 2022 and yes, everything is changing. What are you doing to keep up with change? Take a peek to see what why we’re different. Canopy Mortgage is a better business model that provides Mortgage Loan Officers with ultimate control, unmatched pricing and a proprietary Loan Origination System that promotes highly efficient loan processes and faster closings! Finally, you can give your clients better pricing AND you can make more on your deals. Canopy provides a sustainable mortgage business model that’s good for everyone. Reach out to Josh Neumarker at Canopy Mortgage for more information 888-696-9076.
UMortgage, a nationwide mortgage company, is helping Loan Originators grow their business. Join the weekly call every Thursday at 2pm EST to learn why top producing Loan Originators are making the switch to UMortgage. “Our LOAs, in-house processors, and closing team give us the operations support to win every loan. That leaves me time to do what I do best - helping more consumers and building more relationships with real estate agents, all without sacrificing the client experience.” says Jimmy Hobson, UMortgage Loan Originator and Branch Manager. UMortgage LOs have the autonomy of an independent broker with the safety and support of a retail lender. With 24/7 access to industry leaders, UMortgage Loan Originators are set on the path to success. Sign up for the next recruiting call here.
Flagstar Bank has named Jim Linnane President of Flagstar’s distributed retail mortgage division, responsible for strategy, profitability, sales, growth, recruitment, and operations of Flagstar’s distributed retail mortgage business. (Flagstar is the nation’s 6th largest bank mortgage originator.)
Atlantic Bay Mortgage Group announced the addition of Scott Reise as SVP and Regional Manager of Atlantic Bay’s newest northeastern region where he will oversee the growth and development of Maryland, Pennsylvania, Delaware, West Virginia, Washington D.C., and Northern Virginia. Congratulations!
Lender & broker software and services
“ClearEdge Lending is proud to announce our partnership with Appraisal Shield to enhance our appraisal process. Appraisal Shield acts as a one-stop-shop for order management. It provides the ability to place and manage orders and communicate with both the AMC and our appraisal staff directly from the broker portal loan file. There are no user credentials needed to login, eliminating access waiting time. Live local turn times are displayed next to each AMC in the drop down allowing you to choose the right AMC based on historical performance. All order milestones including status and communication are displayed within the loan file. An added feature is the electronic delivery of the appraisal sent to the borrower. This partnership with Appraisal Shield is yet another example of how ClearEdge Lending is committed to providing our clients with a cutting-edge lending experience. Please visit ClearEdge Lending to become an approved mortgage partner.”
“FGMC (NMLS #2917) has expanded our guidelines on our proprietary suite of Non-QM products, Maverick Solutions. We are now offering up to 85% LTV on our 12-month bank statement program, up to 80% LTV for cash-out refinance on second homes and investment properties, and up to 65% LTV for condotels! Contact Paul Jones to get started with Maverick Solutions today. Mavericks in Motion: FGMC will be at the MBA Secondary & Capital Markets Conference & Expo May 15-18th. Whether you’re looking for a wholesale or non-delegated offering, our team can help! Contact Lynn Bristow to schedule a meeting at the conference.
Netflix recently estimated that over 100 million households are sharing account passwords and that changes are looming. This came after their first decline in users in over TEN years. But that’s showbiz, baby! Competition is fierce in the streaming industry and the mortgage industry is no exception. Online lenders are likely stealing your customers by hooking them with “mortgage calculators” and then following them with ads on Facebook, Instagram, Twitter… you catch our drift. With QuickQual by LenderLogix, you can give your borrowers a customized calculator that allows them to run their own payment and closing cost scenarios. The best part? Borrowers can update their own pre-approval letters with just a few clicks! You set the parameters custom to their financials and they’ve got immediate answers right in their pocket. Don’t make borrowers look elsewhere for answers… because your competitors will answer them. Get a sample QuickQual sent right to your phone.
Tired of losing time, money, and sleep because of your social media compliance? Created for the financial industry, by the financial industry, ActiveComply is a cloud-based solution that collates social media for IMBs, banks, credit unions, & more. ActiveComply monitors profiles and post content 24/7 to ensure regulatory compliance and protect brand reputation and is constantly adding new features like our new Translations Collections Folder to help capture potential UDAAP violations. Our solution bridges the gap between marketing and compliance, but don't take our word for it. You can check out our episode of The Mortgage Collaborative’s “TMC Success Stories” with FirstBank Mortgage or explore other client testimonials. If you're planning on attending the Texas MBA Annual Conference next week, schedule time to meet with our team and learn more about how ActiveComply can help you manage your social media compliance with confidence.
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M&A: Alive and well
Isn’t the first, won’t be the last…
In M&A news, two national residential lenders, LendUS and CrossCountry Mortgage, have signed a definitive agreement to partner in order to best help their borrowers and employees going forward. Founder and CEO of LendUS, Rob Hirt, stated, “The next few years will be very difficult for nearly every lender, and the IMBs that survive the next few years are those companies with a deep balance sheet, proprietary non-QM product, and a balanced geographic footprint. I think that IMBs with less than $50 billion in originations need to find partners that have like-minded thinking about supporting and growing its salesforce, and we found that CrossCountry Mortgage has the best internal structure, policies, procedures, and management of all the retail-only IMBs with more than $50B in annual originations.
“Both Ron Leonhardt and I truly care about our people and we will make tough decisions in order to save as many co-workers as possible while growing when competitors are contracting. This move will help LendUS avoid laying off close to 25-50 percent of our staff as others are doing. LendUS will in fact be the largest division within CCM and LendUS C-suite will be staying on indefinitely.”
For lenders thinking about similar moves, Garth Graham, Senior Partner (954-325-7816) with the STRATMOR Group, has some tips on successful M&A steps for lenders and vendors. “Start early to figure out how to maximize value: There may be things you can do to “stage” the house, and that takes some level of planning. Ensure confidentiality: don’t just start taking calls without thinking through disclosure risk. At STRATMOR we typically engage with sellers in a confidential process to determine the best likely buyer and then coordinate a confidential process to have buyer and seller engage.
“Focus on model match and culture. Buyers and sellers need to have a level of compatibility to make the deal work. After all, you typically are going to work together after the sale, and the key is that it’s a good fit not just a good price. Earn outs can be very valuable if it is the right buyer with synergy. If a buyer can make more money with the sellers platform, then that extra earnings is part of a well-structured earn out. Often buyers focus only on upfront cash and don’t pay enough attention to the post closing earnings. Be realistic and be willing to compromise. A ‘scorched earth’ negotiation will ultimately create issue, the classic example of winning a battle but losing a war. Do not disclose potential or pending transaction prior to close date to anyone other than those that MUST know.
“Make sure you evaluate the transaction impact from the perspective of Sales staff, Ops staff and Corporate staff. It’s not just salespeople that are impacted. Does pricing, product menu, benefit programs, lending opportunities, technology tools and resources stay same or better? That is what typically drives retention. Be disciplined with your objectives and evaluation. If you want a deal too badly, you may very well get it badly. Celebrate the transaction with your employees but do not oversell it or apologize for it. A good deal often means better opportunities for the employees, and they need to know that.” Thank you, Garth!
Looking at bonds yesterday, a selloff in MBS and Treasuries resumed yesterday after Fed Chairman Powell made a 50-basis point hike at the May FOMC meeting sound like a done deal and signaled support for further aggressive tightening. "We really are committed to using our tools to get 2 percent inflation back," the Fed chair said. The goal is to tame inflation without sinking the labor market, and the directive seems to have shifted toward “front-end loading” further aggressive tightening to curb inflation. The careful response stemming from pandemic uncertainty to surging price pressures has come under fire as it has delivered neither stable prices nor maximum employment.
Speaking of employment, America’s job market is red hot. Initial U.S. unemployment claims continue to fall, dropping 2k to 184k in the week ended April 16. Continuing jobless claims decreased to 1.417 million, which means there are fewer Americans claiming unemployment benefits than at any time since 1970.
The NY Fed Desk will conduct two operations today targeting up to $2.4 billion 30-year 3.5 percent through 4.5 percent. These are the first operations to include 30-year 4.5 percent since April 2020. That comes as the latest Primary Mortgage Market Survey from Freddie Mac saw new local highs in fixed rates yet again with the 30- and 15-year rates rising 11 basis points and 21 basis points to 5.11 percent and 4.38 respectively, respectively, which are the highest since 2010.
Today’s economic calendar contains the non-market-moving preliminary April IHS Markit Manufacturing PMI and IHS Services PMI. After Fed Chairman Powell’s remarks at an IMF debate yesterday, the IMF/World Bank Spring Meeting continues today with scheduled appearances including European Central Bank President Lagarde and Bank of England Governor Bailey. We begin Friday with Agency MBS prices roughly unchanged after all the price changes Thursday and the 10-year yielding 2.92, also unchanged.