2.27.23 Creative Equity Products; MPOWER Financing's Sasha Ramani on Ditching Credit Scores; Losing the Inflation Fight

Thanks to today's podcast sponsor, Built Technologies. Construction and real estate solutions for better financial management. Improve business performance with faster, smarter tools, for all stages of the property lifecycle 

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Here in Las Vegas (Why did the Dalai Lama go to Las Vegas? Because he loves Tibet) the population is about 650,000 with all manners of housing, subdivisions, and lifestyles. But around the nation and world, there are numerous ways and places to live. Here’s a story about a former NFL star who says he saved money by living inside Cincinnati Bengals stadium. What do Stowe, Vermont, Whitefish, Montana, and Lake Placid, New York have in common? The three U.S. towns made Travel & Leisure’s 25 Most Beautiful Small Towns. If you only want a house for part of the year, with elevated mortgage rates and home prices having risen considerably, the solution might be buying 1/6 of a house. Or sharing equity, which is what some of your borrowers and homeowner clients consider. “An Unlock HEA gives you cash in exchange for a portion of your home’s future value.” Or one can live underwater. (Today’s podcast can be found here and this week’s is sponsored by Built Technologies. Construction and real estate solutions for better financial management. Improve business performance with faster, smarter tools, for all stages of the property lifecycle. Today’s has an interview with Sasha Ramani, CEO of MPOWER Financing on companies beginning to ditch credit scores when loaning money.

Employment

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A top-rated national retail lender with headquarters in the Southeast is searching for a VP of Sales to join its exec team. This lender has strong backing that provides stability, an elevated level of support and a large residential builder network which offers expansive growth. The VP of Sales will design, develop and execute on thoughtful strategies and tactics to increase business development and strengthen customer and partner relationships. Interested parties can send confidential resumes to Chrisman LLC’s Anjelica Nixt for forwarding to the company.

“Strength, stability, and expertise come from navigating 35 years in every market. That’s what Flagstar brings to the table, along with nearly $90 billion of assets. We are one of the nation’s largest bank mortgage originators and the second largest warehouse lender, originating loans from a diverse product set in every TPO delivery channel. Whatever your business initiative, know this: Flagstar is committed to the TPO mortgage space and well-positioned for long-term success. Are you an experienced AE looking for a new opportunity? We’re hiring! Choose Flagstar. Visit us or reach out to John Gibson.”

“Are you looking for a new challenge and an opportunity to advance your skills and career in a great working environment? Do you have experience in the fintech space? An Austin-based fintech is looking for an experienced, ambitious Chief Technology Officer to lead its technology development and implementation. The CTO will be responsible for providing solid technical leadership in all aspects of our business and ensuring that the technology infrastructure and systems support our business goals. This person will be working with a talented cross-functional team to bring industry leading solutions to market. Candidates must be well-versed in current financial market and technology trends as well as modern software development practices, cloud computing and containerization. Want to learn more? Send your resume to us.”

Broker and lender products and services

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The Konami Code is one of the most well-known cheat codes in video game history. Unfortunately, lenders can’t just press a sequence of buttons to make productivity struggles disappear. But that doesn’t mean there isn’t a solution that’s nearly as simple and effective! SimpleNexus, an nCino company, is helping lenders hack the mortgage experience with its single-sign-on mobile homebuying application that connects lenders, real estate agents, and homebuyers from pre-application to close. If you’re attending ICE Experience 2023 this week, SimpleNexus invites you to “Level Up” at booth #125. Come for the free t-shirts and stay for the retro video games and illuminating discussions about the latest advancements in digital home lending. Want to put your name on the mortgage industry’s leaderboard? Earn a top score with SimpleNexus.

“With over 35 years of experience in mortgage banking, Richey May knows the industry from every angle. And we’ve created a wealth of services and products to help lenders stay ahead - audit and tax services, cybersecurity solutions designed to protect company assets and sensitive borrower information, intelligent automation tools for streamlined operations...you name it! Whether you're leveraging our innovative platforms or having us work as your extended team for outsourced internal audit or accounting services, get ready to tackle challenges faster with some serious firepower on your side. Everything you need: contact our experts today!”

“The Freeze is Thawing… Are You Prepared? Dramatically increase Processing & UW productivity, improve file data accuracy, and deliver faster approvals using Zoral’s Mortgage Suite of AI powered, intelligent automation solutions. From automated document classification to automated analysis and calculation of borrower income and assets, to automated conditions to automated funding and warehouse line clearing, Zoral offers the most comprehensive suite of automation capabilities available in the world. For the past 18 years, Zoral Labs has been a global leader in creating innovative fintech software and technology. Bonus: We know and speak mortgage. For more information, or a demo, please contact Zoral directly.”

Maybe if mortgage brokers lived on Venus, where there are 5,832 hours in a day, they’d have enough time to perform their own customer service, marketing, processing and compliance duties by hand. Luckily, there are better options than moving 130 million miles away. To help busy brokers manage their time more efficiently, the Black Knight team behind Surefire CRM and Mortgage Marketing Engine has developed a free eBook breaking down proven marketing strategies and tools to help brokers succeed in today’s high-cost market. Learn stellar marketing tools and techniques that save the day for time-strapped mortgage brokers. 

When it comes to HELOCs, experience matters. Computershare Loan Services (CLS) has a 20-year reputation for subservicing HELOCs with tightly managed processes, air-tight compliance, and security checkpoints that protect their clients’ MSR assets. But don’t take my word for it. Moody’s, S&P, and Fitch consistently report top ratings for CLS’ proficiency in servicing HELOCs and many other asset classes. That’s just one reason banks, credit unions, IMBs and FinTechs choose, and stay with, CLS. Start 2023 off right by tapping into the time-tested strength of Computershare Loan Services, a recognized prime and default subservicer that gives clients a whole new level of portfolio protection. Contact CLS today.

Do you want to get in front of top clients and referral sources and generate immediate business? Check out the The StorySeller Virtual Summit on April 19-20. The event is hosted by Gibran Nicholas, who will interviewing several big-name speakers about how to grow business and build your personal brand using StorySelling. A marketing partnership would be a good fit if: (1) You want to put on a world-class, super-unique “wow” experience for clients and referral sources without tying up any of your internal resources; (2) You want your company’s branding to show up exclusively whenever someone logs into the virtual event using your link; and, (3) You want to generate high-quality leads and close immediate business. If you’re a potential marketing partner who can drive at least 1,000+ attendees to a free virtual event like this, email Gibran directly to learn more about a private-label marketing partnership.

Non-QM products

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AmWest Funding Corp, one of the nation's leaders in Non-QM lending, is launching a Non-QM Delegated Correspondent Channel. AmWest Funding is thrilled to launch its array of Non-QM programs, including VOE, Alt Doc, Bank Statement, One Year Tax Return, and DSCR programs to a broader clientele. Here at AmWest Funding, we have been setting the bar high in mortgage lending since 2016. Our team is passionate about providing our lenders (or business partners) with competitive pricing and an expansive array of products that allow them to excel. If you are looking for an investor (or business partner) who will assist you in closing more deals by supplying tailor-made NQM solutions to a broader selection of clients, contact AmWest Funding or visit our website for more opportunities.

“Founded over 70 years ago, Logan Finance offers the premium Non-QM experience for our Partners. Logan’s Non-Delegated Correspondent and Wholesale channels specialize in Non-Agency products including Bank Statement, Full-Doc Non-QM, DSCR, Foreign National, Asset Qualification, Non-Warrantable Condo, and Mixed-Use loans. We believe that having competitive products and pricing are table stakes for any mortgage organization. We created a new standard for Non-QM. One where our partners have the highest confidence in our delivery; and in our ability to help grow their client base. Our Non-QM service is so reliable, our partners call us ‘the Agency of Non-Agency™.’”

There is a lot of talk in the market about FHFA restrictions and how they might affect loans for investment and second homes properties. At Angel Oak Mortgage Solutions it’s simply business as usual. Agency guidelines are tightening. Angel Oak has programs to fill in the gaps to help get those investment and second home properties closed.

Credit newsbytes

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After two years of aggressive loan growth, particularly for credit cards and personal loans, and serious delinquency rates that generally remained near pre-pandemic levels, the consumer credit market will experience more pronounced changes in 2023. TransUnion’s 2023 Consumer Credit Forecast projects delinquency rates for credit card and personal loans to rise to levels not seen since 2010. At the same time, demand for most lending products will remain high relative to pre-pandemic levels with the number of consumers securing auto and home equity loans increasing on an annual basis. Despite a challenging macroeconomic environment, TransUnion’s new Consumer Pulse study found that more than half (52 percent) of Americans are optimistic about their financial future during the next 12 months. The forecast found that there is room for optimism with auto loan and home equity originations expected to rise next year. While credit card originations are expected to drop from 87.5 million in 2022 to 80.9 million in 2023, the number of new cards opened will remain much higher than at any time in the last decade.

Unlike most other tradelines, debt collection tradelines rarely report positive information like on-time payments, and result in reporting of collections tradelines being almost entirely harmful to consumers. The Consumer Financial Protection Bureau (CFPB) released a report examining trends in credit reporting of debt in collections from 2018 to 2022. The report found the total number of collections tradelines on credit reports declined by 33 percent, from 261 million tradelines in 2018 to 175 million tradelines in 2022. The share of consumers with a collection tradeline on their credit report decreased by 20 percent in the same timeframe.

Experian® announced Experian Verify™ can now be accessed through Freddie Mac’s Loan Product Advisor® asset and income modeler (AIM). The move gives mortgage lenders the opportunity to leverage the most up-to-date employer payroll data to verify income and employment information while delivering a frictionless experience for borrowers. “AIM provides lenders with a simpler and more efficient loan origination process by leveraging third-party service providers like Experian to automate traditionally manual processes for assessing borrower income and employment. The addition of Experian Verify provides lenders with new options while adding an additional layer of flexibility and ease to the verification process… Coupled with Experian’s recent move to become an authorized report supplier for Fannie Mae’s Desktop Underwriter® (DU®) validation service, this move makes Experian one of the few providers who are authorized report suppliers for both government-sponsored enterprises (GSEs).”

Citi Correspondent Lending updated various credit policies related to Agency DU DTI Overlay and FICO Removal and Agency DU Jumbo, Agency Cash-Out Seasoning, DU Cash Flow Assessment, Verification of Social Security Numbers, DU Appraisal Waiver and Desktop Appraisal, Use Of Business Funds for DU Loans, Temporary Leave Income, Contingent Liabilities, Gift Funds and Gift of Equity. Citi Correspondent Lending Bulletin 2023-02

also includes clarifications on numerous topics.

MPOWER Financing believes that using credit scores through TransUnion, Experian, and Equifax is an outdated and antiquated way for businesses to loan money to people. “Today, few lenders have deviated from using these three companies who use two credit scoring models, VantageScore and FICO Score. MPOWER Financing, a Public Benefit Corporation, is one of the first fintech companies to ditch credit scores to lend international students money. Instead of using credit scores, collateral, or co-signers the company lends students money based on their earning potential. This radical new approach has been extremely successful, thanks to the firehose of data that is now available about how much people in different careers make.”

Capital markets: temporarily quiet

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January was an awful month for the Fed in its battle against inflation. Friday’s higher than expected PCE inflation data has shifted market expectations for the Federal Reserve to continue tightening monetary policy through its June meeting rather than pause in March. Inflation increased 0.6 percent in January and year-over-year was increased from 5.0 to 5.4 percent. This will likely compel the Federal Open Market Committee, the action arm of the Fed, to continue its aggressive fights against inflation, keeping interest rates elevated longer than many hoped. The minutes released from the last committee meeting showed there were some members who favored a more significant 50 basis points increase to the fed funds rate rather than the 25 basis points that was approved.

Fourth quarter GDP was revised from 2.9 percent to 2.7 percent in the second estimate while the annual rate was unrevised at 2.2 percent. A pullback on goods spending continued to weigh on economic activity during the quarter as most activity resulted from increasing inventories and smaller trade deficit. 

This week’s economic calendar kicked off with volatile durable goods for January (-4.5 percent, but ex-transportation +.7 percent). It was expected to decline 4.0 percent month-over-month after increasing 5.6 percent in December. Later this morning brings NAR Pending Home Sales for January, the Dallas Fed manufacturing index, and remarks from Board Governor Jefferson. The remainder of the week includes advance economic indicators, home prices indexes, consumer confidence, and final Q4 productivity/unit labor costs. We begin the week with Agency MBS prices nearly unchanged from Friday and the 10-year unchanged from Friday, yielding 3.95, and the 2-year at 4.80 percent.

(Part 1 of 5.) You can retire to Arizona where…

1.  You will park three blocks away from your house because you found shade.

2.  You can drive for four hours in one direction and never leave town.

3.  You have over 100 recipes for Mexican food.

4.  You know that "dry heat" is comparable to what hits you in the face when you open your oven door at 500 degrees.

5.  The four seasons are: tolerable, hot, really hot, and ARE YOU KIDDING ME??

You can retire to Minnesota where…

1.  You only have three spices: salt, pepper, and ketchup

2.  Halloween costumes have to fit over parkas.

3.  You have seventeen recipes for casserole.

4.  The four seasons are:   almost winter, winter, still winter, and road repair.