1.30.23 Industry Churn; ZestyAI's Attila Toth on AI Adoption; Fed Week

Thank you to Milestones. Giving homeowners an all-inclusive homeownership experience including: home value and equity monitoring, home maintenance reminders and how-to articles, cloud-based document storage, one-click access to hire professionals for various projects around the home, and much more. 

Transcript

Want to really let someone know that you’re no longer interested in them? For $10 the San Antonio Zoo is offering a special Valentine’s Day greeting for exes who keep bugging you after you part ways: naming a cockroach after your not-so-special someone and feeding it to an animal. What about when a lender parts ways with a loan officer? Obviously a new company may not have the same product set, and good luck to LOs who rely on one product and then are cut loose, especially if it is a purchase-centric product. For example, I bet all of those Flagstar originators will miss that portfolio product: A well-priced ARM that allowed clients to buy before selling. (Flagstar offers a wholesale and correspondent channel, by the way.) (Today’s podcast can be found here and this week’s is sponsored by Milestones. Giving homeowners an all-inclusive homeownership experience including home value and equity monitoring, home maintenance reminders and how-to articles, cloud-based document storage, one-click access to hire professionals for various projects around the home, and much more. Today’s features an interview with ZestyAI’s Attila Toth on AI in the property tech space and at what point the companies that fail to adapt become obsolete.)

Employment

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The top 3 reasons mortgage sales professionals change companies: 1) Poor service levels compromising relationships with clients and referral partners. 2) Inadequate sales and marketing support. 3) No chance for advancement or opportunity to take their business to the next level. The top 3 reasons mortgage sales professionals join radius: 1) Nimble and proactive IMB that’s right-sized to meet today’s changing demands. 2) Takes the guesswork out of marketing with their marketing team. 3) Allows you to your own mortgage dream team, or take advantage of theirs. At radius financial group, the focus is on YOU! Empowering you to build and run your business, your way. We give you the tools to help you strengthen relationships and you can build your own mortgage dream team, or take advantage of ours. Either way, you’re an actual shareholder of everyone’s success! For confidential inquires please contact Carla Herra.

FHA has 1 vacancy for Director, Real Estate Owned Division in Denver, Co. Responsibilities include, but are not limited to, review technical reports of property damage which may have occurred since evaluation of previous reports. Assert surveillance over the proper use of accessible contractors. Ensure necessary precautions to protect vacant properties against vandalism and seasonal damage. 2 vacancies for Management Analyst, Job Announcement Number 23-HUD-440-P: develop management plans, procedures, and methodology, analyze and evaluate Housing functions and activities being considered for conversion to contract operations.

Cenlar FSB, loan subservicer and federally chartered wholesale bank, announced that Nayda McKain has been promoted to VP, Human Resources Business Partner and will lead a team of HR professionals and work closely with executive leadership to advise on human capital functions and continue to deliver on Cenlar’s business strategy.

Lender and broker software, products, & services

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Karl Otto Pöhl famously said, “Inflation is like toothpaste. Once it’s out, you can hardly get it back in again.” But, you can do something to offset the impact of a challenging economy: outsource your processing, underwriting, or closing functions to Computershare Loan Services (CLS). CLS can help you lower costs and improve productivity, in any market. Leverage its 20 years of experience and top talent to help you with your entire pipeline, from conventional, non-QM, and FHA loans to multiple product types, including HELOCs. CLS’ expertise and discipline are just a few reasons clients choose and stick with them. Contact CLS to find out how you can squeeze every opportunity out of 2023.   

“At Richey May we dig in and go deep. We have been focused on the mortgage banking industry for over 35 years. It’s where we came from and it’s what we know. This singular intent has created a full suite of services and products designed specifically for mortgage banking leaders by people who truly know the ins and outs of your operations. Our goal is to equip mortgage leaders with the best, whether that means you are utilizing our game-changing platforms or leveraging our experts as an extension of your team, so you can accomplish your goals more easily and stay ahead of the curve. From audit and tax to accounting services, cybersecurity to intelligent automation, and business intelligence, we have you covered. Contact our experts today to learn more about how we can help you reach your goals.”

Lenders: Want to improve borrower experience and reduce cost per loan? Start with a free evaluation of your appraisal operations. Using its proprietary Appraisal Performance Index with aggregated data from 12 months’ worth of appraisal transactions, Reggora can tell you how your appraisal fees, turn times, and revision rates compare to other lenders across the U.S., in your state, and in individual counties. Book your private benchmarking session today.

Can you achieve an elastic operations model? TRUE can help. Let's prove it to you! The challenge for lenders continues to be predicting volumes and aligning staffing needs with that volume increase or decrease. The solution? Adopting a more elastic business model that easily adapts to changing volumes without adding fixed costs. Now is the moment to make you lending business fit for the future, whatever that may entail. Put TRUE to the test and see how our technology can make your lending manufacturing process succeed.

In the cold grip of winter, proper prep is a must. The DocVerify remote online notarization (RON) platform from Black Knight can help keep your loan pipelines from freezing over by letting you and your customers sign and manage documents on the go. DocVerify is allowed in every state where RON is legal, so you’ll never have to worry your customers will be left out in the cold. And with in-person, hybrid, and fully digital eSignings supported on one safe and secure platform, DocVerify will be the last RON tool you’ll ever need. So why not beat the winter blues? Head somewhere warm this winter and keep your loan pipeline flowing while you lounge poolside. Let Black Knight show you RON at its best.

Business Insider’s list of the worst endings in literary history reminds us that authors of great skill can still choke on the ending. In a borrower’s homeownership story, the last thing a lender wants is to give a borrower a disappointing ending. Understanding the unique perspectives of each character in the homeownership story, from borrower to mortgage advisor to loan servicer, empowers lenders to provide more timely, consultative services that keep borrowers coming back for more. On Feb. 8 at 1 pm ET, join Sales Boomerang and Mortgage Coach’s Alex Kutsishin and Sagent’s Dan Sogorka to learn how mortgage professionals can play a more prominent role in each chapter of the borrower story. Start writing a great story today.

Want to stand out at ICE Experience 23? Then check this out: Lender Toolkit is putting on its 2023 Lender Toolkit Supercar Experience and it is accepting sponsors until Feb 1. I’ll be racing a car there myself. You can have your logo on your choice of a selection of Ferraris, Lamborghinis, Porsches and more. You’ll get prominent branding and visibility, and you can invite prospects and clients to this high-octane event. Brought to you by Lender Toolkit, Lenders One and Reggora, the exotic car racing event will take place on February 27 from 12:30-4:30 pm just before the start of ICE Experience 2023. Apply to become a sponsor today by contacting Brent Emler or by downloading a sponsorship form here. Should be a blast!

Fifty-five years after the assassination of Dr. Martin Luther King Jr, the homeownership rate for black households is lower than when fair housing laws were passed in 1968. "A big part of this disparity is lack of culturally relevant homebuyer education," says Gibran Nicholas, CEO of Momentifi. “While the rest of the country is embroiled in left-wing vs. right-wing debates about divisive topics, our industry is uniquely positioned to do something productive... right now.” In honor of Black History month that kicks off Wednesday, Momentifi is offering its personally branded homebuyer education tools for FREE during the month of February. You and your team can use this expert content to record videos or simply click and post to social media. Loan originators can click here to sign up. Email Gibran directly if you want to partner with Momentifi on this to amplify the great work you’re doing as an industry vendor, GSE, or housing finance agency.

STRATMOR on technology return on investment

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Have a stationary bike or elliptical machine collecting dust in your home? You’re not alone. Of course, if you’re not seeing the fitness results you want, you certainly can’t blame the equipment. Yet that’s just what many lenders do when they don’t see the ROI they expect from mortgage technology. In the January issue of STRATMOR Group’s Insights Report, Senior Advisor Sue Woodard explains why lenders need to look at more than dollars and cents when measuring technology ROI. According to Woodard, the best results are achieved when users commit to change and adoption. “Lenders would like to see a return in several areas, but when they don’t get it, they often blame their technology partners,” she says. “Here is an uncomfortable truth: the lender and the vendor both share responsibility for making technology deliver.” Check out Woodard’s article, “Unlocking the ROI of Mortgage Technology” in STRATMOR’s January Insights Report.

Conventional conforming updates

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Lenders are still digesting the updates announced to LLPA (Effective Feb) are similar to what was announced in November. The middle of the LLPA grid will see fee increases for refis, while the most leveraged and lowest credit quality borrowers will see some relief. This seems in line with the goal to help credit constrained borrowers. But the devil is in the details, as noted in Saturday’s Commentary.

Fannie Mae Legacy LIBOR Replacement Index Servicing Notice announces the replacement index that will be used for servicing legacy single-family LIBOR mortgage loans is the spread-adjusted term SOFR administered by the CME Group Benchmark Administration, LTD. and published by Refinitiv Limited. The Federal Reserve Board selected the replacement rates as required by the Adjustable Interest Rate (LIBOR) Act and in anticipation of LIBOR’s cessation on the day after June 30, 2023. Review the LIBOR FAQs and the LIBOR Transition page for additional information.

Fannie Mae posted new Release Notes on its implementation of Desktop Underwriter® (DU®) Version 11.1 during the weekend of Feb. 25, which will include an updated risk and eligibility assessment. Other changes include a HomeStyle® Renovation update, a new message for loan casefiles where no borrower has a credit score, the retirement of DU Version 10.3, and more. Also posted is Fannie Mae Integration Impact Memo.

Fannie Mae published Spanish translations of the uniform instruments on a new multi-language resource webpage for lenders to support Spanish-speaking borrowers. Although the translations of these documents aren’t executable, they’re helpful resources for those with limited English proficiency. Additional languages will be available later this year. Access the Spanish translations of the uniform instruments. Access the English uniform instruments. Visit the Multi-Language Resources for Lenders page.

Freddie Mac’s Loan Selling Advisor® met the new year with hot new enhancements to spark your loan delivery process. Find out more about Cash-specified Payups, ULDD 4a Mandate Preparation and Testing Reminders, Improved Import Loan Processes for New Unallocated Loans.

Pennymac Correspondent posted a new announcement 23-04: New Seasoning Requirement for Freddie Mac Cash-Out Refinance Transactions.

Pennymac Correspondent announcement 23-03: January Product Highlight | Affordable Lending.

Freedom Mortgage Wholesale posted Freddie Mac Credit Policy Update, regarding cash out refinance seasoning policy effective for mortgages with settlement dates on and after March 7, 2023. The last date to close cash out refinances under the previous guidelines is 01/31/2023.

Freedom Mortgage Wholesale Correspondent Division issued a client reminder of the updated Fannie Mae and Freddie Mac legal documents.

All Freddie Mac conventional loans funding on or after Wednesday, February 1, 2023, must meet the new cash out lien seasoning requirement. In PRMG Product Update 23-02, some changes are shown, additional information is available in PRMG’s Product Profiles.

Stay in the “know” with Plaza Home Mortgage Wholesale. Learn about AMI LLPA Waiver in BREEZE | Training: Fannie Mae and Freddie Mac | FAMP Central Tradeshow.

PennyMac will introduce new LLPA adjustments in its Best Effort pricing starting with 60-, 75- and 90-day lock commitments, effective Monday, February 6, 2023. PennyMac will display the new LLPA worksheet by adding a new tab into the rate sheet. For additional information, view PennyMac Announcement 23-10 - Fannie Mae and Freddie Mac LLPA Changes.

With Bulletin 2022-25, Freddie Mac announced multiple Selling Guide updates, including a new 12-month seasoning requirement for a first lien mortgage that is being paid off with proceeds of a cash-out refinance mortgage. Impacts on AmeriHome guidelines are posted in announcement 20230110-CL.

Citizens Correspondent National Bulletin 2023-02 includes information on Conventional Conforming and VA Product Updates.

Capital markets: Fed week… .25 percent hike?

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Last week saw a mixed bag of economic data, leaving markets to continue to contemplate the peak of the Fed’s monetary tightening cycle and the potential for a recession in the U.S. fourth quarter Gross Domestic Product rose a respectable 2.9 percent, bringing 2022 annual growth to 2.1 percent. However, the core business cycle components, such as consumer spending and business investment, began to contract. Inflation data continued to show signs that price increases are slowing, but services prices remain elevated and are preventing a more rapid decline of the overall inflation rate. Consumer spending fell 0.3 percent in December, and November’s expenditures were revised to show a 0.2 percent decline from flat. New home sales in December were at a seasonally adjusted annualized rate of 616k and the supply of new homes has increased to 9 months’ worth.

Flipping the calendar, in Central Bank news this week sees the first Federal Open Market Committee meeting of the year where Federal Reserve officials are expected to announce a slowdown in interest rate increases, 25-basis points to a range of 4.50-4.75 percent. We will also receive decisions from the European Central Bank and Bank of England on Thursday.

There is some first-tier data culminating with the January employment report on Friday, though we will receive consumer confidence, PMIs, JOLTS, and productivity / unit labor costs before then. Treasury will announce the details of the Quarterly Refunding on Wednesday and corporate earnings will also help sway sentiment. The week gets off to a quiet start, however, with the only data point being the non-market moving Dallas Fed manufacturing for January, released later today. We begin the week with Agency MBS prices worse a few ticks and the 10-year yielding 3.55 after closing last week at 3.52 percent. (The 2-year yield is 4.24.)

STRATMOR’s Jennifer Smith asks, “Why does a chicken coop have two doors?” The answer, of course is that, “Because if it had four doors, it would be a chicken sedan.”