5.31.23 Active Home Listings; Verisk’s Kingsley Greenland on Catastrophe Risk Stress Testing; House Prices Up

Thanks to Lenders One, one of the largest mortgage co-ops in the country with a diverse mix of 250+ member companies and providers of an end-to-end solution independent mortgage professionals trust to drive profitability and growth. 

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A biologist, a chemist, and a statistician are out hunting. The biologist shoots at a deer and misses five feet to the left. The chemist takes a shot and misses five feet to the right. The statistician yells, “We got ’em!” Are you selling your house? Me neither. Few people are: there are only about 564,000 active listings. That’s about 11,000 per state. In California, where there are 58 counties, that is an average of less than 200 per county. In Wyoming, the least populated state, there are 58 counties so that’s 190 listings per county. Of course, averages don’t apply like that, but it is important to keep things in perspective, and the overarching issue is a continued lack of supply and a strong demand impacting prices, affordability, and sales numbers. Can lighthouses help? Since 2000 about 150 lighthouses have been transferred to new owners, about 80 given away at no cost to agencies, nonprofits or educational organizations willing to maintain them, and about 70 auctioned off for a total $10 million so far. This year, six lighthouses are up for offer. (Today’s podcast can be found here and this week’s is sponsored by Lenders One, one of the largest mortgage co-ops in the country with a diverse mix of 250+ member companies and providers of an end-to-end solution independent mortgage professionals trust to drive profitability and growth. Listen to an interview with Verisk’s Kingsley Greenland on climate risk, stress testing, catastrophe modeling, and macroeconomic policy.)

Employment & transitions

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“Are you an account executive looking to change it up!? Why not Kind Lending!? At Kind, our family of diverse and talented Kind Ambassadors are the driving force behind our new approach to the mortgage experience. We are focused on serving the broker community and their borrowers by providing an array of products, top-notch service by experienced and friendly professionals and superior resources to support their business model. Founded by Glenn Stearns in 2020, Kind Lending is one of the fastest growing mortgage lenders in the country, building partnerships with our customers, who ultimately become family and our reason why. At the heart of it all, our people believe kindness matters and a client's positive experience is everything. Come grow with us! Contact Delfino Aguilar, SVP TPO Production (619.726.0377).” 

Earlier this month Freddie Mac (OTCQB: FMCC) announced the winners of its Home Possible RISE Awards®. The annual program, RISE (Recognizing Individuals for Sustained Excellence), salutes Freddie Mac’s top clients across multiple categories for excellence with the Home Possible® mortgage, Freddie Mac’s affordable lending solution for very low- to low-income homebuyers. Hallmark Home Mortgage earned the Home Possible RISE Award for Greatest Volume. "I'm thrilled and honored that Hallmark Home Mortgage has been recognized with the Freddie Mac Home Possible Rise Award for the Greatest Volume in the Corporate Segment. This award is a testament to the hard work and dedication of our entire team, and we are incredibly proud of this achievement,” noted Deborah Sturges, CEO & Founder Hallmark Home Mortgage.

Evergreen Home Loans™ adds to its awards line up. This year, the company placed on the Puget Sound Business Journal Corporate Philanthropy List for the third year in a row. It honors the region’s corporate philanthropists and companies who have made significant contributions to the community through philanthropic work. “We are committed to making a meaningful impact in our local communities,” said Don Burton, Founder and CEO of Evergreen Home Loans. “And we are humbled by the recognition for this award.” As loan officers, you already positively impact lives and communities… Continue to do so with a company that helps associates give back, provides paid hours for volunteer work, celebrates individual growth, and truly lives its unique and award-winning culture. Visit the Evergreen careers page to explore current opportunities.

Are you a loan officer or mortgage banker frustrated with the constraints of retail lending? Tired of competing against lower rates, fees and closing costs? Then now’s the time to take control of your pipeline and career by making the switch to wholesale lending as an independent mortgage broker. Whether you’re looking to open your own brokerage or join a team as a loan officer, you can get up and running without missing a beat with support from the team at BeAMortgageBroker.com. You have nothing to lose and only clients, greater flexibility and compensation to gain.

loanDepot, Inc. has promoted Alec Hanson to serve as its chief marketing officer (CMO). Hanson will “lead a consolidated marketing team, overseeing the development of brand, digital marketing, and organic and digital lead generation campaigns that drive awareness and revenue growth while differentiating loanDepot’s marketing engine as a competitive advantage for loan originators. Hanson will also be responsible for the company’s originator-led field-level marketing capabilities.”

Lender and broker products, software, and services

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“Have you found yourself digging through loan files to find price concession records while an auditor awaits? Have you ever wondered if your margin is better or worse than your peers? Have you been looking for a way to track how competitive your pricing is, in real time? Optimal Blue, a division of Black Knight, offers data and analytics tools that provide this actionable business intelligence, and more! Our granular rate lock data provides key insights into your business, as well as benchmarking against 42% of all rate lock activity. Reach out to Optimal Blue now to learn how our data and analytics platform can help you develop smarter, more profitable pricing strategies!”

Beer - it’s not just for drinking anymore. In fact, beer is just one of many everyday items with multiple uses that would surprise you. Want another? Remote online notarization (RON) isn’t just for originations anymore. Recently, servicers have discovered the benefits of using RON for loan modifications, partial claims and even assumptions. On average, servicers reduced the average cycle time from 21 days down to 7 days. While we all know that time is money, the reduction in cycle time and carry costs resulted in a savings of about $500 per loan. In today’s environment where we all need to find savings to help improve our margins this is an easy way to get there. Email Suzanne Singer or stop by NotaryCam’s booth 22 at NS3 in St. Louis next week to learn more about the many uses of RON.

“No one does Non-QM like Newfi Wholesale! Our newly expanded Non-QM product suite offers 90% LTV up to $1.5M, loan amounts up to $4M, 2-1 buydowns, DSCR (no minimum ratio) 1-8 units, and alt-doc solutions that make sense for your borrowers. Most of all, we have a passion to close deals and about 1/3 of all of our funded Non-QM deals have common-sense exceptions! In the words of one of the brokers who work with us: “Looking for an amazing Non-QM lender? Newfi is your go-to lender.” We offer industry-leading Non-QM pricing, technology, and product innovation. For more information contact SVP, Non-QM Development & Strategy Dan Bayer or 925-584-0579.”

Tired of slow, low-quality appraisals? Try The Appraisal Marketplace. The Marketplace allows you to fulfill appraisal orders directly from your LOS, without relying on an AMC or managing a panel. Even better, by leveraging real-time appraiser performance data, its “Uber-style” algorithm matches every order with the appraiser that’s truly right for the job. This gives you the fastest turn times, lowest revision rates & lowest fee escalation rates in the industry. Seriously. Learn more.

“CWDL is committed to empowering our clients and friends with mortgage industry-specific education and insights, even when it’s outside of our core focus on audit, accounting, and tax. So, when our clients mentioned they’d like to better understand the perspectives of warehouse bankers and how they evaluate lenders, we organized a panel of industry veterans to share their insights. Join us for our webinar on June 15 to “Meet the Warehouse Bankers,” as we discuss such topics as when and how to best communicate with your warehouse partners; how warehouse banks evaluate counterparty risk in their clients; what lenders should consider or plan for regarding M&A, a winddown or facility consolidation; and much more. This webinar is free and open to all lenders who are looking for more insight into their warehouse relationships. To register, contact Kasey English.”

Agencies, investors, and lenders and the reverse mortgage biz

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The last time I saw a stat, 10,000 people a day were turning 62. And a lot of them have equity in their houses. The National Reverse Mortgage Lenders Association points out that, “Homeowners 62 and older saw their housing wealth grow by 1.95 percent or $226 billion in the third quarter to a record $11.81 trillion from Q2 2022, according to the latest quarterly release of the NRMLA/RiskSpan Reverse Mortgage Market Index… The increase in older homeowners’ wealth was mainly driven by an estimated 1.95 percent or $268 billion increase in home values, offset by a 1.93 percent or $42 billion increase in senior-held mortgage debt.” So, if you’re looking for a growth business…

Need a Pre-Qual? Plaza’s Reverse Mortgage staff will run a complete analysis of your submitted information and send the findings back to you via e-mail, typically within a few hours. The analysis details available funds, interest rates, fees, and other loan information.

Plaza Home Mortgage posted Video Marketing to Seniors. And brokers can use Plaza’s Reverse Calculator to run scenarios and you’ll quickly and easily see how much borrowers could receive, no personal information required.

Fairway Independent Mortgage Corporation has had a reverse division for many years and has seen continued growth.

CrossCountry Mortgage (CCM) announced that it is expanding its reverse mortgage division by making additional investments, resulting in what it calls “enhancements.” “Borrowers heading into retirement are seeking solutions that will benefit their future. CCM’s newly established Reverse One Team offers a specialized network of advisors and tools for loan officers to become certified specialists in originating reverse mortgage loans.”

Reverse training and certification programs among “forward” lenders are increasing. Fairway Independent Mortgage Corp. and Guaranteed Rate, for example, offer pathways within their organizations for forward professionals to become certified in reverse mortgages. Broker shops including C2 Financial also maintain a reverse training and certification program.

PHH Mortgage delivers for the entire mortgage lifecycle: non-delegated, best efforts, mandatory, bulk MSR, and reverse.

While bringing more forward specialists up-to-speed with reverse origination practices can certainly help to expand an LOs or lender’s business, it is well known that anyone interested in the business must be aware of some of the specific differences inherent in originating the product when compared with more traditional, forward mortgage options. And a solid month, volume-wise, might only be one or two loans.

Anyone interested should check out Reverse Mortgage Daily, and think about the use of video in their marketing and consulting with client’s families. “Homeowners aged 55 and over increasingly embrace online video as one of their preferred ways to research and discover information…68% of Baby Boomers use YouTube to watch videos. Half of them watch videos more than once per week, and they’re watching news, educational content, and DIY tutorials.”

Capital markets: housing prices ratcheting up

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The bad news is that mortgage applications continue to falter. The good news is that we finally had a little rally yesterday as bond markets responded to weekend news that President Biden and House Speaker McCarthy reached an agreement to raise the debt ceiling. Rates had risen of late as fears of a U.S. default gained momentum. A default would force the Treasury Department to pay higher interest on its bonds to convince investors to stick around, with mortgage rates and other borrowing costs tending to follow Treasury rates.

In Federal Reserve news, New York Fed President Williams discussed inflation, the labor market, and the importance of price stability yesterday by saying, “Inflation remains too high, and high inflation is hardest on those who can least afford to pay higher prices for food, shelter, and transportation.” He explained that the U.S. is seeing signs of a gradual cooling in the labor market, along with a rebound in labor force participation. Still, unemployment nationally remains historically low, at 3.4 percent.

The first trading day of a shortened week was headlined by house price indexes. The FHFA Housing Price Index was up 0.6 percent in March after increasing a revised 0.7 percent in February. The index was up 4.3 percent year-over-year, with prices in many western states starting to decline for the first time in over ten years. The fastest growing states were South Carolina, North Carolina, Maine, Vermont, and Arkansas. The declining states included Utah, Nevada, California, Washington, and D.C. Separately, the Case-Shiller home price index rose 0.7 percent in March, suggesting that the decline in home prices that began in June 2022 may have come to an end. The S&P Case-Shiller 20-city Home Price Index was down 1.1 percent in March with big declines out West, and the Southeast remaining the country’s strongest region.

Today’s calendar kicked off with the usual mortgage applications from the MBA for the week ending May 26. Mortgage applications decreased 3.7 percent from one week earlier, with activity expected to decline again following last week’s increase in yields amid increasing odds of a 25 basis points hike at the June FOMC meeting. During the reporting period, 30-year mortgage rates hit new highs for the year and their highest since last November.

Later this morning brings Chicago PMI for May, Job openings from JOLTS for April, and Dallas Fed Texas services for May. Four Fed speakers are scheduled: Boston President Collins, Governor Bowman, Governor Jefferson, and Philadelphia President Harker. The latest Beige Book will be released in the afternoon ahead of the June 13/14 FOMC meeting. The rest of the week will be dominated by the jobs report on Friday, the last jobs report before the mid-June FOMC meeting. Fed funds futures currently see a 60 percent chance for another 25-basis point hike. We begin the day with Agency MBS prices better by .125-.250 and the 10-year yielding 3.65 after closing yesterday at 3.70 percent; 4.40 percent on the 2-year.

Skipping the usual joke, what happened to the ol’ “In the event of a sudden loss of pressure, face masks will drop from the ceiling…” the flight attendants spout off about? (True, the plane was going to land soon.) This video shows the inside of a commercial aircraft after a passenger opened the emergency exit door. (Page down a few times.)

Visit www.robchrisman.com for more information on our industry partners, access archived commentaries, or to subscribe to the Daily Mortgage News and Commentary. If you’re interested, visit my periodic blog at the STRATMOR Group web site. STRATMOR’s current blog is titled, “Doing Business with the Agencies: The Golden Ticket?” The Commentary’s podcast is live and at any place you obtain your podcasts (like Apple or Spotify).

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