Chrisman Commentary - Daily Mortgage News

5.17.24 CFPB Funding; Tim Braheem on Working Your Database; Fed Says "Read My Lips"

May 17, 2024
5.17.24 CFPB Funding; Tim Braheem on Working Your Database; Fed Says "Read My Lips"
Chrisman Commentary - Daily Mortgage News
More Info
Chrisman Commentary - Daily Mortgage News
5.17.24 CFPB Funding; Tim Braheem on Working Your Database; Fed Says "Read My Lips"
May 17, 2024

Script Link: https://www.theloanatlas.com/scripts/

Thanks to today's podcast sponsor, LoanCare. LoanCare has successfully navigated clients and homeowners through market change for 40 years. The mortgage subservicer is known for delivering superior customer experience through personalization and convenience. Its award-winning portfolio management tool, LoanCare Analytics™, supports MSR investors with a focus on customer engagement, liquidity, and credit risk. LoanCare is part of Fidelity National Financial, a Fortune 500 company and leading provider of services to real estate and mortgage industries.

Show Notes Transcript

Script Link: https://www.theloanatlas.com/scripts/

Thanks to today's podcast sponsor, LoanCare. LoanCare has successfully navigated clients and homeowners through market change for 40 years. The mortgage subservicer is known for delivering superior customer experience through personalization and convenience. Its award-winning portfolio management tool, LoanCare Analytics™, supports MSR investors with a focus on customer engagement, liquidity, and credit risk. LoanCare is part of Fidelity National Financial, a Fortune 500 company and leading provider of services to real estate and mortgage industries.

We’re only a few days away from the MBA’s Capital Markets Conference. Attendees, don’t forget to pick up your badges, or else! (Speaking of interesting clips, watch U.S. Secretary of State Antony J. Blinken launch the Global Music Diplomacy Initiative; there is a rumor he’ll be on the stage at the next MBA conference.) One of the big topics next week will be servicing rights: transferring, valuing, and managing. The price that borrowers see on rate sheets is a combination of several factors, including mortgage-backed security prices and the price of servicing (which doesn’t always equal the value). Unlike securities backed by Agency mortgages, where there’s an active liquid market with screen prices, in pricing servicing there is no screen to go to. So, a model is employed, and those involved look at the fair market value versus Fair Market Value. (Yes, there is a difference.) A model may value servicing at one price, but it may trade differently resulting in a variance. The market could price a servicing package higher than fair market value, but not often. (Found here, this week’s podcasts are sponsored by LoanCare. The mortgage subservicer is known for delivering superior customer experience through personalization and convenience. Its award-winning portfolio management tool, LoanCare Analytics, supports MSR investors with a focus on customer engagement, liquidity, and credit risk. Hear an interview with Performance Experts Tim Braheem on what originators can be doing right now to get more referrals, including a free script to help close more deals.)


Employment

_________________________________________________


GVC Mortgage is on fire!! New Hire Announcement: 28-year vet Jim Janczy Joins GVC Mortgage as SVP- National Director of Strategic Lending! “We are thrilled to announce the newest addition to the GVC Mortgage family. With 28 years of experience in the mortgage industry, Jim brings a wealth of knowledge and expertise to our growing company. His strategic insight and leadership will be invaluable as we continue to grow and evolve in today’s dynamic market landscape. In this role, Jim will be responsible for overseeing our strategic lending initiatives on a national scale, working closely with our leadership team to drive innovation, optimize processes, and enhance our recruiting efforts in our current lending footprint and beyond. Brock Walradth, CEO of GVC Mortgage, stated, ‘Jim’s proven track record of success in growing mortgage companies, coupled with his dedication to excellence and stellar reputation perfectly align with GVC Mortgage’s values. We are confident that his leadership will play a pivotal role in our continued success and growth.’ Please join us in welcoming Jim to the GVC Mortgage family. We are excited to embark on this journey together and look forward to achieving new heights. Whether you are loan officer, area manager, or regional manager with no support and tired of mediocrity or even a mortgage company thinking about how to navigate survival, please take the time to reach out to Jim and have a conversation to learn why he joined GVC Mortgage and how GVC Mortgage can support your growth and inspire you to thrive. He can be reached at 508-965-8055 or jjanczy@gvcmortgage.com Jim and the GVC executive team will be at the MBA Secondary Conference in NYC May19-22 if you would like to schedule a meeting.”


Evergreen Home Loans™, a leader in the Western U.S. mortgage industry, is proud to announce its fourth consecutive recognition at the Puget Sound Business Journal's Corporate Philanthropy Awards 2024. This accolade underlines our steadfast commitment to community engagement and philanthropy, a core aspect of our corporate culture that attracts passionate professionals dedicated to making a difference. Located across Arizona, California, Idaho, Montana, Nevada, Oregon, and Washington, Evergreen is continually looking for talented individuals eager to advance their careers in a supportive and dynamic environment. Join us in our mission to provide affordable home financing solutions and make a meaningful impact in our communities. Explore opportunities at Evergreen Careers.”


Canopy Mortgage is attracting producing loan officers across the Nation and remains profitable as Q2 begins! How many national lenders can say that they’ve made it to profitability this year? Not many. Canopy Mortgage is forging ahead with significant momentum and looking for branch managers to be part of its success story as Canopy continues to innovate and empower LOs with highly efficient tech that’s driving down the cost to fund a loan. Looking for a better way to run your business? Contact Josh Neuamrker at 888-696-9076 for more information or to schedule a one of a kind Tech-Demo to see where the magic happens.

 

Lender and broker software, products, and services

_________________________________________________


“In the words of Warren Buffett, ‘Risk comes from not knowing what you’re doing.’ Now, let’s consider your confidence in pricing and hedging non-agency loans. You likely recognize that a liquid secondary market fosters increased production, which, in turn, amplifies liquidity within that market. But how does this dynamic impact your loan strategies? OB’s latest white paper, titled ‘Pricing and Hedging Non-Agency Loans With Eris SOFR Swap Futures,’ offers valuable insights addressing this question. Mike Vough, VP of hedging and trading products at Optimal Blue, and Geoffrey Sharp, managing director and head of product development and sales at Eris Innovations share practical ideas for enhancing your loan strategies using these financial tools. Given the challenge of unreliable pricing faced by originators, innovation in both trading and modeling can serve as a lifeline. Download the white paper to gain actionable insights and stay ahead in this challenging market!”


Guideline Buddy, a rising star in generative AI solutions, is thrilled to announce its debut eBook, "Unleashing the Power of AI Chatbots in the Mortgage Industry." Download this informative read that explores the advantages, practical applications, and hurdles of incorporating an AI chatbot into your business. If you’re attending the Artificial Intelligence & Mortgage - The Art of the Possible conference and/or the MISMO Spring Summit in San Francisco next month, catch us on stage and be sure to swing by our exhibit table and say hi. If you can’t make it but want to explore how we can assist you on your AI journey, schedule a demo.


“Repurposing the back office for front-line value is more critical than ever for lenders to remain relevant and profitable. This is where Accenture Credit Service’s thrives. Our Mortgage Business Process Outsourcing (BPO) services help lenders and operators handle volume variability and keep pace with consumer expectations as they evolve. Our distinction? Human talent, augmented by our intellectual property, progressive manufacturing discipline, rigorous quality, and robust analytics—resulting in high-speed cycle times and unmatched efficiency. And with our value-driven partner engagement model, we stay connected, share ideas, and innovate with our clients to help them transform faster to compete in today’s digital world. Ready to transform your operations and stay ahead in today's digital world? Partner with us to leverage our cutting-edge services. Contact Audra Agen today and discover how we can help you achieve unmatched efficiency and success. Let's innovate together!”


Broker and correspondent products

_________________________________________________


Brokers are our universe, and in celebration of Customer Appreciation day, Orion Lending is waiving underwriting fees on all loans uploaded to STAR Portal on Friday, May 17th. To the brokers who have trusted Orion Lending for the past 10 years, we thank you! Not approved with Orion? Sign up today for access! Check out our Proprietary DPA program, Boost Down Payment Assistance with Forgivable Seconds, Repayable Seconds, 1/0 and 2/1 Buydowns and High Balance Options. Looking for more flexibility with loan amounts up to $3.5 MILLION? How about Titan Flex with 5 alternative income doc types, and COIN DSCR! And we don’t just offer a great selection of Loan Programs… Our easy-to-use STAR Broker Portal, on-demand Marketing Studio, and seasoned Underwriting team make Orion the lender to trust. Come see for yourself what the buzz is all about! You’re Not Just Another Broker. We’re Not Just Another Lender.”


REMN Wholesale, recognized as an industry leader in Wholesale Digital HELOCs, has launched EQUITY ACCESS, its new nationwide digital HELOC with loan amounts from $25k to $400k. Fast Closings: Applications can close fast, sometimes in as little as 1 day! As a borrower directed journey - the process will go as fast as they can. Features include Instant Income Verification for the vast majority of W-2 borrowers; automated analysis of bank statements to determine Income for both W-2 and Self-employed borrowers; single AVM up to $400k (appraisal options available); and Broker Portal with robust functionality and real-time detailed status on all pipeline loans. Minimum FICO 640 and max CLTV up to 80 percent (see weekly rate sheet for details). Flexible: Hybrid platform is digitally fast with humans to solve real-life complexities that will result in a higher close rate! And they provide fast payout (utilizing ACH). REMN Training for EQUITY ACCESS is scheduled for 5/21 [click here to register]. To become a REMN partner, email Carl Markman.


The CFPB funding verdict… is anyone really surprised?

_________________________________________________


Two of the Supreme Court’s most conservative justices broke away from other right-leaning members of the nation’s high court in a decision to preserve the Consumer Financial Protection Bureau (CFPB), but a third led the majority opinion that sided with the Biden administration. Justices Alito and Gorsuch dissented from the Supreme Court’s 7-2 vote upholding the agency’s funding mechanism as constitutional, suggesting that the decision undercuts the most “complete and effectual weapon” at Congress’ disposal: its power of the purse.


The CFPB stated, “For years, lawbreaking companies and Wall Street lobbyists have been scheming to defund essential consumer protection enforcement. The Supreme Court has rejected their radical theory that would have devastated the American financial markets. The Court repudiated the arguments of the payday loan lobby and made it clear that the CFPB is here to stay.


“Congress created the CFPB to be the primary federal watchdog protecting consumers from predatory and abusive practices in the financial sector. Since the CFPB opened its doors in 2011, it has delivered more than $20 billion in consumer relief to hundreds of millions of consumers and has handled more than 4 million consumer complaints.


“Today’s decision is a resounding victory for American families and honest businesses alike, ensuring that consumers are protected from predatory corporations and that markets are fair, transparent, and competitive.


“This ruling upholds the fact that the CFPB’s funding structure is not novel or unusual, but in fact an essential part of the nation’s financial regulatory system, providing stability and continuity for the agencies and the system as a whole. As we have done since our inception, the CFPB will continue carrying out the vital consumer protection work Congress charged us to perform for the American people.”


MBA’s President and CEO Bob Broeksmit, CMB, released, “The MBA is relieved that the Supreme Court avoided a ruling that would have disrupted the housing and mortgage markets and harmed the economy and consumers. While we frequently disagree with the Bureau on how they interpret or enforce particular rules, a decision that would have invalidated the Bureaus' previous rules could have had severe consequences for single-family and multifamily mortgage markets.”


Attorney and Mortgage Musing blog author Brian Levy observed, “No one should be surprised about the outcome of this case. While the attack on CFPB’s appropriations has failed, it doesn’t change the fact that the CFPB’s overly aggressive enforcement and interpretations are still subject to challenge; but only if you have the facts, stomach and pocketbook to fight them. Some have suggested that CFPB has been reticent to bring some enforcement actions or to pursue regulatory objectives pending the outcome of this case, so now the floodgates will open. That isn’t my observation. In my view, they have never stopped being aggressive. In fact, as noted in my Mortgage Musings about this funding case last October, CFPB expanded its enforcement team in the face of this funding challenge. For the industry, this decision is just a confirmation that it will be business with the CFPB as ‘usual.’ But to borrow a line from the mockumentary Spinal Tap, CFPB’s amps still go to 11.”


Attorney Richard Horn wrote, “the U.S. Supreme Court issued its opinion in CFSA v. CFPB, a case that I’ve written about here… the CFPB’s funding structure satisfies the Appropriations Clause of the U.S. Constitution. The CFPB will live another day. Although many may be disappointed with the result, because it represented a chance to stop an aggressive CFPB in its tracks, many will also breathe a sigh of relief, because an opinion that the CFPB’s funding was unconstitutional could have rendered all of the CFPB’s past actions invalid. The opinion is also not a surprise after the oral arguments before the Court last October, in which most of the Justices appeared skeptical of the CFSA’s arguments.


Capital Markets: The Fed says, again, “Read my lips!”

_________________________________________________


It’s the same Fed rhetoric, but somehow it sounds new. At least to optimistic investors. No fewer than five Fed officials yesterday kept hammering home the higher-for-longer mantra on interest rates, reiterating that policymakers should wait for more evidence that inflation is easing before lowering the policy target rate range. I’m not a fan of the constant chatter emanating from the modern-day Fed, but fodder yesterday may have been necessary on the heels of investors breathing a sigh of relief following Wednesday’s April CPI report.


Disinflation progress has investors believing the FOMC will ease rates later in the year, should the trend continue. Nobody truly knows much downward pressure monetary policy is putting on the economy, which in the Fed’s eyes probably dictates a need to stay in this fed funds rate range for a while longer until underlying inflation gives policymakers a sense of where it’s headed.


Total housing starts rose 5.7 percent to a 1.36-million-unit pace (versus 1.44 million expectations) in April in the wake of a 17 percent decline in March. Keep in mind that these indicators are volatile month to month. The 1.62 million housing unit completions in April was the second-highest monthly figure in 15 years. Activity in the South region drove the headline figure, but it is still insufficient overall as the country needs 1.6 million or more units for the next few years to bring about balance in the housing sector. Builders broke ground on 18 percent more houses in April compared to a year earlier, while starting about 33 percent fewer apartments, more evidence of the continuing shift from building apartments to building single-family houses as house prices are rising swiftly, while apartment rents are relatively flat.


We also learned yesterday that job seekers’ relocating for new jobs fell to 1.5 percent in the final quarter of 2023, the lowest level on record as interest rates remained high and housing inventory low. However, in the first quarter of 2024, 2.4 percent of all job seekers relocated for new positions, and 3.7 percent of job seekers making over $200,000 moved for new jobs, according to data released Challenger, Gray & Christmas, Inc. Weekly jobless claims showed a smaller-than-expected decrease.


The less-publicized half of the Fed’s dual mandate, maximum employment, is looking increasingly like the pre-pandemic normal after edging up to 3.9 percent in April in the latest payrolls report. That figure tied for the highest since early 2022, as employers added a smaller-than-expected 175k jobs. Other measures of the job market, like job openings, the quits rate, and surveys which show consumers are less confident in their employment prospects, collectively point to an even softer job market than the unemployment rate.


Following a couple of busy days on the economic calendar, the week closes out later this morning with just leading indicators for April. Expectations are for a 0.3 percent decline, the same as March. There are also a couple of Fed speakers on the docket: Governor Waller and San Francisco President Daly. We begin the day with Agency MBS prices roughly unchanged from Thursday’s close, the 10-year yielding 4.39 after closing yesterday at 4.38 percent, and the inverted yield curve continues with the 2-year at 4.79.



(Best of Marcus Lam, 5 of 5)

A lot less people would buy a lottery ticket if the rule was, "Pick a number between 1 and 300 million. If you guess right, you win."

As a kid, magic tricks are amazing because we think there is magic. As an adult, magics tricks are amazing because we know there is no magic.

I saw a guy at Starbucks today. No iPhone, no tablet, no laptop. He just sat there. Drinking coffee. Like a Psychopath.

Thinking about 2009 doesn’t seem like THAT long ago but trying to imagine 2039 seems like a lifetime away.



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. The current blog is titled, “Down Payment Assistance Programs Helpful But Not a Universal Remedy.” The Commentary’s podcast is live and at any place you obtain your podcasts (like Apple or Spotify).

 

qoɹ