11.17.22 Agency Guarantee Fees; Jay Beitel on the Constitutionality of the CFPB; Strong Retail Sales

Thanks to MCT Investor Services, which helps investors scale their seller base, automate the bid process, source whole loan and flow co-issue production, automate AOTs, and analyze performance all in a cost-effective manner. 

Transcript

The release yesterday of FHFA’s report on Agency Guarantee Fees prompted some of the discussion here in Kansas City among mortgage folks about how challenging things have become, especially with rates and pricing. Sure, there are opportunities, but things are tough. Do you think your job is tough? How about this reporter’s? Do you think you’re good at your job, finding borrowers, processing loans, drawing docs, selling the loans, whatever? Really good? This video speaks volumes about someone who is really, really good at their job. Despite millions of millennials still needing affordable housing, many builders think things are tough. The NAHB Housing Market Index hit 33 in November. What does that mean? Builder confidence in the market for newly built single-family homes posted its 11th straight monthly decline in November, dropping five points to 33, according to the National Association of Home Builders (NAHB)/Wells Fargo Housing Market Index (HMI) released yesterday. This is the lowest confidence reading since June 2012, with the exception of the onset of the pandemic in the spring of 2020. (Today’s podcast is available here and this week’s is sponsored by MCT Investor Services, which helps investors scale their seller base, automate the bid process, source whole loan and flow co-issue production, automate AOTs, and analyze performance all in a cost-effective manner. Interview with Jay Beitel of Polunsky Beitel Green on the ruling that the funding structure of the Consumer Financial Protection Bureau (CFPB) is unconstitutional and its potential impact on the industry.)

Originator jobs

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Mountain West Financial is continuing its expansion forward by deepening its roots in Northern California. Click here to hear from longtime branch manager, Tisha Torres, who recently returned to the MWF Family. “I'm excited to welcome our Rio Linda branch back to MWF. This decision is an affirmation of our commitment to Branch Managers and Originators. We are focused on attracting elite professionals and helping originators do more volume,” said Ed Adams, SVP Production at Mountain West Financial, Inc. Interested in learning more about the MWF Family, please reach out to Ed Adams. 

In the Northwest, Banner Bank is searching for Builder Direct Mortgage Loan Officers as well as Mortgage Loan Officers. These are true portfolio lending opportunities with local decision making and direct to Fannie and Freddie loans with retained servicing to assist in client retention and marketing opportunities. Additional highlighted products cover CRA lending with private label no payment down payment assistance to help assist all borrowers with the right opportunity. The right fit for an established team or the individual looking to grow their business and take the next step in their career. Please send resume to Aaron Miller.

There are advantages in being an originator for a national bank, and NBH is looking for growth-oriented originators in its footprint states which include CO, MO, KS, TX, UT, NM, ID, and WY. Any loan originators interested in a career with NBH, please send me a confidential resume for forwarding.

Broker and lender services, software, and products

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The Holidays came early! We got you! LoanStream is giving brokers three great ways to help fill their pipelines! Reason #1: 35 BPS off price improvement on FHA loans for a limited time for eligible loans locked through November 30th! Reason #2 LoanStream’s 1-Year Self-Employed Program! It’s a game changer! Up to 80% LTV Purchase, Refinance and Cash Out available and a 660 Min FICO. Reason #3 Pre-Locks on Non-QM loans for up to 45 days, here for a limited time! Lots of great reasons to contact your LoanStream AE for full details. Not approved yet? Get in the game.

Are you looking to close more loans, faster? Automation technology is transforming the mortgage industry. Top leaders like Jodi Hall (NMB) and Kevin Peranio (PRMG) are using platforms like Capacity to bring AI to their teams, increasing productivity. Originators and brokers use data from many external sources to meet the regulatory requirements during the loan process. The time-consuming task of manually searching contracts, bank statements, loan applications, and guidelines is inefficient. The mortgage industry is in dire need of a platform that securely integrates with lenders’ key systems, providing loan officers with instant, actionable answers about borrower opportunities, loan statuses, guidelines, and more. Capacity reduces the time that LOs spend logging into a sea of endless systems to find information. If this sounds familiar, see how Capacity can save your team time and frustration. See how it works.

As many big lenders scale back their huge pay-per-click budgets, there’s never been a better time to work on your local organic strategy. Check out the upcoming National Mortgage Professional webinar Local Search 101 for Mortgage Brokerages. Local search is the lifeblood of any business in today’s world. The same is true for local mortgage brokerages. Finding new customers and encouraging repeat visits from existing customers often rely on your business’s online presence and how you show up digitally. On Thursday, December 8 at 2:00 PM ET, join Erika Cox, Product Marketing Manager at Podium in this free webinar she busts the local SEO myths and covers 5 ways to up your local search strategy. In this webinar, you’ll learn why local search is a critical marketing strategy, what to prioritize as you manage your online presence and how to optimize your online Google Business Profile to help you find more customers.

Smart. Steady. Stable. According to Inside Mortgage Finance, among the top 25 producers, Planet Home Lending had 4.3% YOY growth, growth shared with only four of our peers. Why? Multichannel stability: Planet retains the majority of our servicing, creating customers for life for MLOs. Products: Everything from conventional to niche so MLOs have more options to serve more borrowers. Technology: BombBomb for easy video marketing, MBS Highway for industry insights, and Homebot to keep you top-of-mind, and more. There genuinely is no better time to reach out to Eastern Divisional VP Kathryn Edelen (301-502-2493), Western Divisional VP Lynette Hale-Lee (818-321-1260), or VP of Talent Acquisition Peter Briggs (435-709-6287). Shouldn’t you #LandAtPlanet?

How much longer will homebuyers hold off? With both sales and prices down 8 and 3 straight months respectively, existing homes (which are 89% of sales) are affordable at a $384,500 median price. But when 7% rates still keep homebuyers in wait-and-see mode, real-time analytics IS your buyer education and engagement, and ComeHome by HouseCanary is your local market research tool for customers. Reach out to sales@housecanary.com for more information. 

“Get the right services, at the right time. With rates climbing and production at historical lows, companies have been forced to lay off corporate personnel, leaving themselves unable to get important work done. If you’re considering outsourcing important functions, you want to do it right. Richey May Advisory provides mortgage industry expertise and the ability to customize as business dictates. Need outsourced accounting and advisory? Our CPAs dive into financials to find hidden opportunities, handling tasks like bill pay and accounts receivables while consulting. Looking for business intelligence? We can help you assess performance versus peers and determine where to make improvements. Need cyber services? We’re highly skilled at-risk assessments, penetration testing, cloud security, and more. At Richey May, we have the tools, knowledge, and experience to augment your team like no one else. Reach out to learn how we can lend support, whenever and however you need it.”

Non-Agency, non-QM, non-conforming, jumbo news

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By now most companies offer other products besides Fannie, Freddie, FHA, and VA. Although loan originators may not use them often, having the ability to offer a borrower something to keep them “in house” is important where volumes are down 60-80 percent from a year ago and every deal counts. Let’s take a glance around the industry to see who’s doing what.

First, taking a look at the secondary markets since those drive the rates and pricing in the primary markets to borrowers, the environment has not been good. A good chunk of jumbo and non-Agency loans are going into depository portfolios and sitting there. Higher rates and increased uncertainty by investors haven’t helped. “Overall, a measly $1.86 billion of new prime non-agency MBS came to market in the third quarter, according to a new tally from Inside Nonconforming Markets. There were only five deals from four different issuers. It was the lowest quarterly output since the final lap of 2016. Just $1.40 billion of jumbo loans were securitized in the third quarter, a 72.8% decline from the previous period.”

Are you a true investor looking for a business purpose loan? Excelerate Capital offers DSCR Investment Property Loans, qualify using rental income , no personal income required. DSCR <1.00 acceptable with LTV restrictions, available for 1-4 Residential Units and 5-8 Multi-Family Properties.

Unite Mortgage now has DSCR 5-8 Unit Property options available. Highlights include up to 75% LTV Purchase & R/T and up to 70% LTV Cash-out. Interest Only available, gift funds allowed for down payment and closing costs. Loan amounts from $150K to $3M available.

LoanStream Mortgage has a Bank Statement Program that'll expand your pipeline. NanQ Products offer 12 & 3 Month Bank Statement Programs, up to 90% LTV Purchase to $2,000,000, up to 85% LTV Purchase to $2,500,000 and up to 80% LTV Rate/Term & Cash Out.

Wells Fargo Funding is updating Exhibit 20 – Non-Conforming Loans, effective November 21st. View C22-025nc Newsflash for more information. (Wells also announced Policy Updates in Newsflash C22-043. Specifically, identifying information required for vested nonborrowers associated with a Loan effective December 5, 2022. Updates regarding flood insurance for detached structures on all Loans, effective November 21, 2022. Clarification regarding Appraiser bias.)

PRMG is now offering TPO Choice Non-QM Products. View PRMG Product Update 22-63 for more information.

The new, final version of IRS Form 4506-C is available. See AmeriHome Correspondent announcement 20221103-CL for details.

Capital markets: Fed conjecturing continues to dominate news

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MCT announced the release of BAMCO, a new marketplace for co-issue loan sales that brings co-issue transactions directly into MCT’s whole loan trading platform and improves price transparency by connecting unapproved sellers to live executions from potential buyers. BAMCO supports and expands upon the functionality provided by the agencies to facilitate live shadow pricing and more granular MSR bids. BAMCO is the latest in a series of groundbreaking innovations from MCT, from their original focus on best execution analysis to more recent rollouts such as electronic TBA trading and automation for Assignment-of-Trade (AOT) transactions. There is no additional cost for MCT hedging clients to use BAMCO, which was released as part of their normal best execution loan sales process earlier this week. Join MCT for a webinar on December 8th at 10 a.m. PT where Phil Rasori and Justin Grant will introduce BAMCO. Interested parties can register here for the webinar.  

With home prices declining, new listings down 20.8%, and listing removals up 56.2% YoY, home valuation accuracy is more important than ever when buying homes and loans, or determining whether LTV overlays are necessary in some markets. HouseCanary is your national brokerage to monitor fast and buy intelligently. Filter and review active listings as they hit, and run 3yr home value forecasts using market volatility, local income, and other factors. Test drive HouseCanary to see how. Reach out to sales@housecanary.com for more information.

Turning to the bond market, and thus interest rates, sometimes rates don’t move the way you’d think they would. Like yesterday. Despite strong retail sales data surprising the upside in October (+1.3 percent month-over-month and +8.35 percent year-over-year), and “hawkish” comments from at least two Federal Reserve officials, Treasury yields and mortgage rates dropped again to loan officer's delight yesterday. Following the stronger-than-expected October Retail Sales Report showing that consumer spending continues to hold up fairly well, supported by continued low levels of unemployment, the Atlanta Fed GDPNow model estimate for Q4 real GDP was revised to 4.4 percent from 4.0 percent. There was also friendly import-export price data, though homebuilder sentiment fell again, according to the NAHB Housing Market Index as higher interest rates have significantly weakened demand for new homes.

There were a couple Fed speakers Wednesday that recast market expectations that the central bank’s strategy of rate hikes is pivoting. San Francisco Fed President Daly stressed that a pause is “off the table” and that she thinks a 5.00 percent fed funds rate is a reasonable level where the Fed can hold rates, but that the terminal rate could be as high as 5.25 percent. Fed Governor Christopher Waller did say that the data of the past few weeks has made him more comfortable considering stepping down to a .5 percent (50-basis-point) hike looking toward the FOMC's December meeting, but New York Fed President John Williams hurt sentiment after he said the Fed should avoid incorporating financial stability risks into its considerations.

Today’s economic calendar is packed with data, Fed speakers and supply. We’ve already received weekly jobless claims (222k from 225k, 1.507 million continuing claims), Philadelphia Fed manufacturing (-19.4, bad), and housing starts / building permits (1.425 million, +4.2 percent for starts; permits 1.526 down slightly). Later this morning brings Freddie Mac’s Primary Mortgage Market Survey, the Kansas City Fed composite index, and a Treasury auction of $15 billion reopened 10-year TIPS. Scheduled Fed speakers include Atlanta President Bostic, Governor Bowman, Cleveland President Mester, Minneapolis President Kashkari, Governor Jefferson, and Chicago President Evans. We begin the day the week before Thanksgiving with Agency MBS prices worse .250 and the 10-year yielding 3.76 after closing yesterday at 3.69 percent based on the news this morning: housing continuing to stumble but the employment picture is strong.

I’m sure we’ve all be on roller coasters. But had this happen? (And is there an analogy for mortgage bankers?)