5.2.22 John Sayre on the ARM Market; FOMC Events This Week

Thanks to MCT’s BAM Marketplace, the world’s first truly open loan exchange, where buyers can bid regardless of approval status, and sellers receive automated live pricing from every buyer on the platform. A revolutionary new era of maximized liquidity, eliminated barriers, and optimized execution is waiting for you. Join the vanguard of lenders reaping the competitive benefits of BAM Marketplace.

Transcript

Besides a reminder that it is Teacher Appreciation Week, how about some loan officer humor to lead off Monday? “We’re closing on our house next week. Sorry we didn’t use you.” “Oh, that’s okay. You should really go buy a new car this week to celebrate.” LOs have a lot going on, including dusting off their adjustable rate mortgage playbooks: ARMs are making a comeback. Rate talk dominates. Unfortunately, the pricing isn’t quite there yet to their complete liking. And despite the uptick we’ve seen in ARM locks (around 8 percent industry-wide), the yield curve is extremely flat, so there is limited incentive to move into a 15-year loan or an ARM at this point. And regarding the yield curve, the two-day Federal Reserve meeting will conclude with a rate announcement this week on May 4. The market has fully priced in a 50 basis points hike for May and at least another five to six 25-point hikes are expected before the end of year. Chairman Jerome Powell is likely to keep a cautiously hawkish posture during the press conference without any solid macro reason for a policy change. (Today’s podcast is available here and this week’s is sponsored by MCT’s BAM Marketplace, the world’s first truly open loan exchange, where buyers can bid regardless of approval status, and sellers receive automated live pricing from every buyer on the platform. Today’s has an interview with John Sayre Vice President of Client Success for Curinos, on recent rate lock trends and the emerging ARM market.)

Employment

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The Atlantic Home Lending, Inc. (“AHL”) team has joined Mortgage Equity Partners (“MEP”) to optimize its lending capabilities throughout the East Coast. AHL is an independent mortgage banker founded in 2005 by Mike Siraco and Diane Burke to provide a diverse portfolio of mortgage products, competitive rates, and personalized service to consumers throughout MA and NH. MEP is an independent mortgage banker and direct lender with lending operations located along the East Coast. Founded in 2009 by Sean Riley, MEP provides mortgage financing - emphasizing service, education, and technology. Mike Siraco from AHL will take over the role of EVP/National Sales Director. Mike has extensive expertise in managing loan production, investor relations, pricing, and capital markets. Diane Burke will assume the role of VP of Regional Operations. Diane has extensive underwriting knowledge and has managed sales, operations, secondary markets, commercial and construction lending. MEP and AHL share the same mission and customer-centric lending philosophy. Adding AHL team members to MEP further underscores our commitment to growth and the independent mortgage banking model as the best way for consumers to explore and obtain home financing.

“Acra Lending, the leader in Non-QM lending, is hiring! Specializing in various Loan Programs including Bank Statement, Investor Cash Flow, Foreign National, ITIN, and Fix & Flip/Multifamily programs, it’s never been a better time to join. We are actively hiring experienced Wholesale Account Executives, MLO’S,  Fix and Flip Account Executives, Correspondent Sales, and more! At Acra Lending, you will work with experienced, dedicated, and passionate people that are motivated to leading us as the industry’s fastest growing private mortgage lender. If interested, email careers@acralending.com or apply directly at JoinAcra.”

If you wanna make up to $167k per year, the FHA has a job in Santa Ana, CA: Supervisory Single Family Housing Specialist, job announcement #22-HUD-1454-P. This position is responsible for the development, implementation and/or recommendation of operating procedures and systems, staffing patterns, and budget required to carry out a cost effective and efficient risk management program.

Lender & broker programs and services

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Starting on May 1st, HomeBinder is excited to join the Art of Homeownership (AoH) offering for Loan Officers and Real Estate Professionals who care about using education and technology to build better relationships with borrowers. As part of this bundling, members of the Art of Homeownership will be able to offer HomeBinder to all of their borrowers, past, current, and future. The president of AoH, Melissa Stokes offered, “AoH delivers best in class resources to homeowners to ensure they are successful in their ownership; and to our mortgage partners to promote lasting relationships with their clients. HomeBinder is an invaluable resource for homeowners as it relates to managing and maintaining their home. We are thrilled to provide HomeBinder to our 200,000 homeowner members and many more in the years to come.” To learn more about HomeBinder, click here to schedule a time.

Northpointe Bank Correspondent Lending is pleased to announce the rollout of Investor ConnectTM. Investor ConnectTM is the direct integration software between Encompass and the Northpointe Correspondent Lending Portal. This integration will allow you to deliver loans and clear pre-funding conditions for loans submitted to Northpointe Bank without leaving your LOS. Northpointe Bank provides tailored solutions to maximize your profitability and help your business grow. Please reach out to clientrelations@northpointe.com for more information on your next steps. Northpointe Bank Warehouse Lending also recently announced its integration with Warehouse ConnectTM earlier this year. For more information, contact Ashley Lockaby, Director of Warehouse Lending.

Spring break 2022 may be a wrap, but the secondary market is still wild and crazy! Partner with an expert that can help you navigate the secondary market and its complexities: Computershare Loan Services (CLS). Come and chat with the CLS team during MBA's Secondary & Capital Markets Conference & Expo, May 15 – 18 in NYC, to learn about the benefits of a CLS partnership. From their co-issue MSR acquisition platform to their servicing solutions, CLS's pricing and programs make doing business easier. Contact the CLS team today to schedule a time to meet in NYC!

Support automation is transforming the mortgage industry. Companies like NMB, PRMG, and Assurance Financial are using platforms like Capacity to bring AI to their teams, increasing productivity. Originators 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 super inefficient. Using mortgage automation tech like Capacity frees loan officers from tedious tasks and shoulder taps, giving them more time to build relationships, and close loans faster. Capacity correctly and instantly answers more than 90 percent of all questions without any human intervention, 24/7/365. Ready to see the power of the platform? Request a demo to learn more.

Find savings up to $125 per loan! MERSCORP Holdings, brings you the mortgage industry’s standard national electronic registry system in the MERS® System and continues its support and growth for eNotes with the MERS® eRegistry. During March 2022, a huge milestone was achieved by crossing over 1.6M eNotes registered since inception of the MERS® eRegistry. 220+ companies are now live on the MERS® eRegistry which represents a 35 percent year-over-year increase in the number of companies transacting eNotes. This continued growth of eNote transactions only reinforces the demand for a truly digital mortgage experience. Leveraging the MERS® System, and the legal framework to support the requirements as mortgagee, has saved lenders up to $125 per loan when servicing is transferred. Paired with the MERS® eRegistry and support for RON Video Storage, MERS continues to pass even greater savings to members delivering digital transactions. For more information on MERS, contact us today.

Wholesale and correspondent lenders, are you looking to reach a bigger audience of brokers and NDC’s? If so, check out Broker Marketplace by Lender Price. Expand your product and pricing to additional brokers not currently in your network. Make it easier for brokers to find your programs and connect with you. Lender Price Marketplace has 3x as many brokers compared to other legacy broker platforms out there and is fast becoming the largest marketplace in the industry. See a demo today or send an email to sales@lenderprice.com to learn more. You can also book a meeting with the Lender Price team at the Mortgage Innovator’s Conference on May 2nd and MBA Secondary Conference and Expo on May 15th.

Correspondent & wholesale loan products

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McDonalds is now selling Steak!!! Kidding. McDonalds does Burgers and ACC Mortgage does Non-QM. So why would you want to send your Non-QM loan to a company that is known for doing conventional loans? ACC Mortgage is the oldest Non-QM lender, since 1999. The lender that survived 2007-08. The only Non-QM lender to lend throughout COVID. Now in 2022, with all the market volatility, ACC has honored every single lock. Go get a Big Mac and send your Non-QM loans to ACC. If your company is struggling with Non-QM or you are looking to make a switch, call us 877-349-050.

“Symmetry Lending has made some exciting enhancements to our already market-leading HELOC products. As the premier purchase HELOC provider, we offer margins as low as Prime +0.00% up to 89.99 percent CLTV. We also offer rates as low as 3.50 percent, minimum initial draws down to $25,000 on piggyback transactions, and maximum loan amounts up to $500,000, all with fewer overlays than ever before! Visit Symmetry’s Credit & Income Guide and Pricing Guide to learn more. Whether it is to reduce the LLPAs for high-balance or second homes, to eliminate MI, or to take advantage of condo limited review, the Symmetry HELOC is a great product to supplement your client’s 1st mortgage. All of these enhancements are complemented by Symmetry’s industry-leading turn times and provide fantastic solutions for your clients to achieve greater financial flexibility. For all of these updates and more, please reach out to your Symmetry Area Manager.”

Events and training in May & June

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National MI offers up free training classes through its University program.

Join LDW trainers for upcoming webinars ranging from mello® Broker Portal to Renovation training. Additionally, loanDepot’s Calendar includes upcoming events too.

Join MMLA for important webinar on May 3rd to hear how the market is reacting to inflation and the Ukraine war. Hear from Joel Kan, AVP for the Mortgage Bankers Association (MBA). Register for MMLA’s Economic Update on May 3 presented via Zoom. 

PRMG’s Live Webinars for the month of May include sessions on Evaluating Income with MGIC. Why line items matter on a Schedule C with Essent. Delivering Exceptional Customer Service with Radian. Enact’s Shut the Door on Fraud Part II, identify common fraud trends and schemes. Product specific trainings this month include PRMG's non-QM offerings (available to all channels): Investor Solution and Expanded Access.

Georgia? The MBAG Live Convention will be held May 9–12 at The Ponte Vedra Inn and Club. Ohio? The OMBA 2022 Annual Convention – “Rising To Meet Tomorrow” is May 9-10 with CE.

Register for a webinar on May 11th at 11am PT where broker dealer panelists will share their opinions on the latest FINRA 4210 amendments and associated implications for mortgage lenders. The webinar will be moderated by Chris Anderson of Agile and feature panelists Tom McHugh of JVB, Matt Johannes of StoneX, and Rob Branthover of Huntington Securities. In this webinar, attendees will be briefed by the panelists on the SEC order approving FINRA amendments to Rule 4210 (“Margin Requirements”) for Covered Agency Transactions, and the potential impact of the FINRA amendments approved by this SEC order.

Register for the CoAMP Reverse Mortgages Class on May 19 from 2pm-4pm at 7979 E Tufts Ave, Denver CO. Richard Stewart with Supreme Lending will present, “Everything you wanted to know about reverse mortgages but were afraid to ask...” Other Classes in 2022 CoAMP Educational Series to Include: Insurance, Real Estate Contracts, Credit, and Self Employment.

This June 2-3, join IMN for The 3rd Annual Non-QM Forum in Dana Point, CA. The Non-QM market has bounced back in the last year and is forecast to grow substantially in 2022, there has never been a better time to convene the industry and capitalize on Non-QM opportunities. There is an expected audience of 500+, consisting of a 'who's who' in the industry. Register now and use code “ROB20” to save 20 percent on your ticket.

The Indiana MBA State Convention is June 6th and 7th in Fort Wayne. Receive state legislative updates, learn about the state of the economy from the MBA’s Joel Kan, and the regulatory landscape from Jack Konyk!

MISMO’s Spring Summit will be held in Charleston. S.C., June 6th -9th. Register to attend MISMO’s Spring Summit, in-person or via livestream.

Join NYMBA in Saratoga for the New York MBA Annual Convention and Inaugural golf outing, June 7-9. Hear top speakers, relevant sessions. Member pricing $495.

ACUMA’s Workshops are back! The American Credit Union Mortgage Association, absent from the workshop scene for the past three years, is back with vengeance in 2022. In fact, ACUMA’s Eastern “Deep-Dive” Workshop, which kicks off in Nashville on May 3, is sold out! But never fear. There is still room to register for a seat at the association’s Western Workshop, scheduled for June 14-15 at the Nines Hotel in Portland, Oregon. Topics include 2022’s Top 5 Mortgage Compliance Considerations, Mining the HMDA Disaster, Developing Effective Credit Union Advocacy Efforts and more. Register now at https://acuma.org/acuma-upcoming-events/. You won’t want to miss this one.

The MBA of Hawai’i is hosting its Annual State Conference in Honolulu June 21–June 23. If you come, please say hello!

Join the top dealmakers and private lending experts in the red-hot market of Dallas, TX for high level networking, deal flow exchange, raising investment capital and gathering of critical industry data on June 21-22nd at the National Lending Expo (NLE).

By popular request for company budgeting purposes by years end, MBAF released the registration, exhibit, and sponsorship information for the 18th Annual Eastern Secondary Market Conference and 68th Annual Convention in June. The schedule is outlined and currently are finalizing all the speakers and sessions, but the times will stay as is.

Capital markets: the Fed

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In an increasingly constrictive housing market, be the one with options. MAXEX, the first digital mortgage exchange, gives you immediate access to ready-to-buy investors with a wide range of available programs and services. Nimbly adjust to rising rates with aggressive ARM pricing or reduce risk and hedge your book with a forward bulk trade. Learn more about MAXEX’s expanding options and upcoming programs at this year’s MBA Secondary and Capital Markets conference in Times Square. Schedule your meeting with MAXEX today!

The most significant economic reading last week was that the U.S. economy contracted at a 1.4 percent annualized rate in the first quarter compared to an expectation for a 1.0 percent gain. It was a big miss, but quickly written off that while net exports and inventories were responsible for negative 4 percentage points towards the headline number, there were positives in personal consumption and fixed investment. Personal spending accelerated, showing Americans aren’t afraid to dig into savings to keep spending to maintain their standard of living in the face of higher costs.

Last week we also learned that the Employment Cost Index showed total compensation rose a record 4.5 percent on a year-over-year basis and consumers reporting jobs are “plentiful” remained near record highs in the latest consumer confidence report. Wages and salaries for workers were up from the same period a year ago, yet those gains have increasingly been subsumed by inflation; real incomes declined 0.4 in March as inflation outpaced income gains and the personal savings rate fell to 6.2 percent; far below the record highs observed during the pandemic. The PCE deflator, the Federal Reserve's favored price gauge, accelerated to 6.6 percent in March, a smidge below consensus.

All the above reaffirms expectations that the Fed will raise interest rates by a half-point at its meeting this week. Traders are already pricing in a near-equal chance that U.S. central bankers in June will raise their benchmark rate by 75 basis points, a move not seen since the aggressive tightening cycle of 1994.

May’s economic calendar kicks off with a bang, including the latest FOMC events (where a 50-basis point rate hike and the announced start of quantitative tightening is expected) and the Quarterly Refunding announcement on Wednesday, as well as the April jobs report on Friday. After the Fed, the BoE, Norges Bank, and RBA will all be out with their latest monetary policy decisions on Thursday. Today’s releases begin later this morning with final April S&P Global manufacturing PMI, followed by March construction spending and April ISM manufacturing PMIs. This week sees the Desk purchasing up to an average of $2.0 billion per day, of which ⅔ will be in UMBS30s. Today’s schedule sees the Desk in conventionals for up to $1.9 billion across 15-year 3 percent and 3.5 percent and 30-year 3.5 percent through 4.5 percent. We begin the week with Agency MBS prices worse .125 and the 10-year yielding 2.92 after closing last week at 2.89 percent.

A country in chaos is not a country in which books are read or libraries maintained. With what is happening in Ukraine, and will, unfortunately, be happening into the foreseeable future, it is worth the short read of, “In Flanders Fields”. It was written by John McCrae, a Canadian army doctor, following the death of his close friend and compatriot Lieutenant Alexis Helmer. Helmer was killed today, May 2, in 1915 when a shell exploded during a German gas attack.