8.22.23 Western Secondary Updates; Title Insurance Alternatives; S&P Downgrade

Thanks to today's podcast sponsor, PHH Mortgage. For over 30 years, PHH Mortgage has provided industry-leading mortgage services and helped countless homebuyers and homeowners find financing solutions to meet their needs. Their reputation is based on building and maintaining relationships that last long after you get the keys to your home or complete your refinance. Whether you are looking to purchase a new home or refinance your current mortgage, PHH Mortgage offers a wide variety of loan options, including conventional, VA and FHA. Learn more at phhmortgage.com.

Transcript

Phantom Planet sang, "California here we come, right back where we started from.” Many here at the Western Secondary have spent their entire career in California, which makes sense given that, over the decades, 20-25 percent of the nation’s home loans come from here. Overheard in the hallway yesterday: “I’ve been in this business so long, I remember when the big sleeping area in the house was called a ‘master bedroom’ and not a ‘primary sanctuary.’ That aside, there are more serious topics about staying afloat, and further staffing and overhead reductions are coming. Rember that from 2021 to 2023 the number of units (not the volume) is down 2/3. How about your staff? Loans have gotten harder to do: interest rates are higher, short contract times, affordability, quality standards, borrower’s variable income, LOs not doing their homework in submitting files, borrowers having multiple jobs or quitting before the loan funds. The list goes on. (Today’s podcast can be found here and this week’s is sponsored by PHH Mortgage. For over 30 years, PHH Mortgage has provided industry-leading mortgage services and helped countless homebuyers and homeowners find financing solutions to meet their needs.)

Lender and broker software and services

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The Beverly Hillbillies discovered oil by accident after an errant bullet caused oil to bubble up from the ground, but not everyone can strike it rich by taking shots in the dark. Sales Boomerang by TrustEngine illuminates lenders’ CRMs with alerts that take the guesswork out of prospecting by letting lenders know which contacts are ready for a loan and when. Mortgage Coach by TrustEngine helps mortgage advisors earn borrower trust and seal deals with advice that puts borrowers on the path to achieving their homeownership and financial goals. Learn how TrustEngine’s winning combination of Mortgage Coach and Sales Boomerang can help you strike it rich.

¿Qué quiere decir esto? That’s what your Spanish speaking borrowers are thinking when you present them an English-only online loan application. LiteSpeed by LenderLogix lets you appeal to the 13% of US households that speak Spanish as a first language. Check it out here.

“With over 35 years of experience in mortgage banking, Richey May knows the industry from every angle. Many of our team members are credentialed industry experts who dedicate much time to building up other industry experts. From this expertise, 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!”

When thinking about effective approaches for succeeding in this market, two ideas come to mind. First, understand prospective homebuyers within the context of their economic uncertainty and get back to the basics of why homeownership still makes sense. Highlight building equity, and consider discussing the framework of creating generational wealth, especially for first-time buyers! Also, underscore the emotional aspects of ownership, like pride, stability, and better family environments. Next, articulate secure tactics to make purchasing more affordable: things like down payment strategies, interest buydowns, and ARMs offering lower payments as the market steadies. (Keep in mind buyer bias against ARMs; counter with education on their contemporary framework). Usherpa, the #1 ranked Mortgage CRM in both customer satisfaction and loyalty, is here to help you through this, and every, challenge. Download this free informative PDF for homebuyers.

Use technology to play the long game in today’s market. The market downturn means that homeowners who took advantage of low interest rates in 2020 and 2021 aren’t planning to move any time soon. However, recent data found one third of homeowners are looking to take out a home equity loan instead in the next year. Data also shows borrowers only consider one to two lenders before making a decision who they use. This means there is a step forward where lenders can nurture existing relationships and lay the foundation for repeat and referral business. Leveraging technology to cultivate customer relationships can allow you to stay top of mind for those seeking a HELOC or home equity loan, and even when they want to refinance or purchase down the road. Curious how? Learn how ICE Mortgage Technology® can help you prepare for the next wave here.

Servicing tools

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When your military customers are on active duty, they need to focus on the mission at hand – not managing their mortgage. The Servicemembers Civil Relief Act (SCRA) provides legal and financial protections to active-duty military members and their families, and mortgage servicers must have the proper policies and procedures in place to manage the administration of this benefit. In fact, mortgage servicers that aren’t prepared for compliance with the SCRA may find themselves facing costly fines and legal fees, as well as damage to their reputation and customer relationships. Learn five ways to improve SCRA compliance in Black Knight’s blog post, “Navigating the SCRA in a Rising Interest Rate Environment.”

Tax season is almost here. Not the April 15th federal deadline that immediately jumps in people’s minds, but rather the annual 4th quarter state property tax wave which year after year, most mortgage servicers continue to struggle with. With inadequate processes, procedures, and controls, subpar mortgage servicers continue to cause frustrations with their customers and MSR owners with their inability to meet the increased escrow demand and failure to execute timely and compliantly. With many experts projecting rising delinquencies, the pain will be magnified for MSR owners, who are forced to advance much needed capital on behalf of delinquent customers. The need to partner with right subservicer has never been more critical. Bolstered by a high touch, high tech, and proactive approach to delinquency management, Servbank has a proven track record of reducing delinquencies even in the toughest market conditions. Combined with their proprietary escrow management and analysis technology and frictionless boarding tools, Servbank is the right industry partner and bank subservicer to help reduce your advances. Partner with Servbank today.

Webinars, training, and in-person events this week

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Here in Orange County the California MBA’s Western Secondary is going strong. (Next year’s is August 19-21.) For a list of conferences for the remainder of the year and into 2024, click here and then “conferences,” and let me know if there’s something you’d like to add.

Today is Mortgages with Millennials with Kristin Messerli and Robbie Chrisman, and sponsored by National MI. Tune in every Tuesday at 10AM PT to the weekly video show designed to empower mortgage professionals to tap into the millennial market. This show demystifies the psychology of first-time homebuyers and offers strategies to win more market share with a key segment of the market. Sign up for a weekly reminder with the link to join and a sneak peek into the next episode.

MBA Education Budgeting and Financial Planning for Non-Believers Webinar will provide mortgage bankers with the reasons why establishing, tracking, and modifying an annual financial plan or budget is essential to success in the mortgage banking industry. August 22 | 2:00 PM - 3:30 PM ET.

National MI University's August Webinars: Power of Mindset in Today's Market ​​​​​with Rebecca Lorenz - August 22nd at 1pm ET.

Looking for more in-depth commentary on weekly mortgage news? Register here for "Mortgage Matters: The Weekly Roundup” presented by Lenders One. Every Wednesday at 2:00 PM EST/11:00 AM PT is a dive into a range of mortgage-related topics, including market trends, interest rate fluctuations, innovative mortgage products, and industry advancements. Tomorrow’s show is sponsored by Lender Toolkit and includes Brett Brumley, CEO

MBA Education Current Expected Credit Losses (CECL) Updates Webinar, designed to reduce volatility for banks and deliver predictable and consistent returns for investors. With the variation of adoption dates, some as early as 2020 and others just beginning in January of 2023, there have been lessons learned along the way. August 24, 2:00 PM - 3:00 PM ET

Join PRMG University to learn about using Symmetry HELOCs option for wholesale and non-delegated correspondent channels, Wednesday, August 23rd 12:00 PM PDT.

Mortgage payoff fraud is a growing threat and costing homeowners millions of dollars nationwide. Join October Research, Wednesday, August 23rd @ 2:00 p.m. ET, for a critical webinar on how to prevent and address mortgage payoff fraud. National fraud experts, Tom Cronkright and Mike Rothman will be joined by Sherry Conner-Neuman to discuss how these fraudsters operate and provide a step-by-step analysis of how Neuman was able to respond to a recent scam and prevent the loss of funds. expose the warning signs and reveal the vulnerabilities that may leave your operation at risk.

On Thursday, August 24th 1:00 PM PDT, learn about the FHA 203(h) product, the Mortgage Insurance for Disaster Victims program, which allows for up to 100% financing for the purchase of a new home for borrowers who owned or rented a home.

The 2023 Kentucky Affordable Housing Conference (KAHC), Rising to the Challenge: Building A Stronger Kentucky, will be held at Central Bank Center in Lexington on Thursday and Friday, August 24-25. Offering a wide range of training, panel discussions and networking opportunities, whether you're interested in specialized housing, mortgage lending, single-family development, multifamily development, or HMIS. The general business development sessions will cover cyber security, diversity, language access and more. #KAHC23 is hosted by Kentucky Housing Corporation (KHC).

Friday the 25th at noon PT is the next edition of The Mortgage Collaborative’s Rundown, covering current events in the mortgage market for 30 minutes: “The Rundown”.

The Knowledge Coop's new membership platform offers all state and federal Continuing Education courses in an engaging and exciting video format that you're sure to actually enjoy. Want to give yourself a sharper competitive edge? They also offer in-depth training on specific topics like VA Loans and FHA within their Coop Academy. Get access to industry experts and connect with other mortgage professionals all in one space. Use Code Chrisman10 for 10 percent off your first year of membership here.

Capital markets: rates a little up, and little down, on no news

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Recently we saw the Fitch downgrade of the U.S. debt, and Moody's rating cuts of banks. Now S&P has downgraded five regional U.S. banks due to tough operating conditions, including Comerica and KeyCorp. S&P echoed concerns over higher for longer interest rates and asset quality risks, especially for lenders with material exposures to office loans. However, their outlooks were revised to stable, reflecting improved stability and relatively good funding metrics. A Fitch analyst recently warned that U.S. banks could see more downgrades if the operating environment weakens further.

The final days of August means the summer lull has hit full swing. This week will be dominated by talk of the Jackson Hole Summit which, due to the long timespan between the July and September FOMC meetings, has investors looking for clues over the Federal Reserve’s “hawkishness.”

There is some talk that Fed Chair Powell will focus his Friday speech more on dissuading investors from pricing in rate cuts next year than signaling further increases this year. Two front-of-mind topics will probably be China's collapsing real estate bubble and the surprising strength of the U.S. economy. The 10-year bond yield has risen almost 40 basis points since the end of July and as markets searched for direction ahead of Fed Chair Powell’s speech, U.S. Treasuries began the week with losses across the curve, hitting fresh 2023 highs.

Today’s economic calendar is underway with Philly Fed August non-manufacturing and later, after the Commentary goes out, existing home sales, Richmond Fed manufacturing and services indexes for August, and remarks from Richmond Fed President Barkin, Chicago’s Goolsbee, and Board Governor Bowman. We begin the day with Agency MBS prices slightly better, the 10-year yielding 4.31 after closing yesterday at 4.34 percent, and the 2-year up at 4.98.

Hal M. writes, “The McDonalds bit in your commentary Monday reminds me of the person at the airport waiting in line to check in their luggage.

The person in front of him was incredibly rude and abusive to the agent behind the counter.

The agent remained completely composed and polite.

When the abusive person was finished and had left the counter, he commented to the agent that he could not believe how tolerant she was.

It’s easy said the agent, he’s going to Houston and his bags are going to Honolulu!