10.24.23 LO Basics; Part Two of Chris Wiley on AI; A Rare Rally

Thanks to today's podcast sponsor, Visio Lending. Visio is the nation's premier lender for buy and hold investors with over 2.5 billion closed loans for single-family rental properties, including vacation rentals. Visio is fast, simple, and dependable when it comes to financing rental properties. They believe time is money, and strive to be upfront and consistent about their qualifications. Using a simple DSCR rather than a complicated NOI calculation, there are no tax returns or personal financial statements, and their pricing is set, so you always know your rate. Learn more, including about Visio’s top-notch broker program, at https://www.visiolending.com/. 

Transcript

I was very excited last Saturday when I rode my bike by a garage sale and saw, “The Holy Bible” for sale, with a “signed edition” sticker on it. Of course I bought it. How cool is that? Trains are pretty cool too. “A railroad conductor needs to make sure he doesn’t go down the wrong track and lose his train of thought.” This morning I head to Milwaukee by train. While in Chicago I spent some time hearing how LOs must get back to the basics, including clear routines and discipline. They must provide education and guidance since LOs are in the “people business.” Technology is a great tool, but not the end-all in the loan process: AI may not take your job but somebody who can use AI might. Lenders, and real estate agents, are asking, “How are companies training a new generation of LOs and other residential mortgage workers?” (Today’s podcast can be found here, sponsored by Visio Lending and its top notch broker program. Visio is the nation's premier lender for buy and hold investors with over 2.5 billion closed loans for single-family rental properties, including vacation rentals. Listen to Part Two of an interview with TechMor’s Chris Wiley on how mortgage companies can best assess the benefits of AI for their organizations.)

Lender and broker software, products, and services

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In a housing market that feels like a fever dream to LMI and FTHBs, lenders are ramping up down payment assistance (DPA) support at a rapid pace. Just last month, Down Payment Resource (DPR) welcomed six new lenders to its platform, equipping them with an integrated toolset that makes it easy to operationalize DPA across departments and geographies. More than a comprehensive database of the nation’s 2,300+ programs, DPR takes the hard work out of DPA. Its DPA Directory enables product managers to curate programs that meet secondary market requirements, while its Loan Officer Portal automatically matches incoming borrowers with approved assistance programs, its Underwriter Portal provides quick access to program guidelines, and its Consumer Portal generates leads by inviting homebuyers to search for DPA. Schedule a demo with DPR to discover how you can stand out as the go-to resource for home financing in the communities you serve.

Equity Prime Mortgage (EPM) partnered with OptiFunderTM to leverage its Warehouse Management System for optimized funding decisions and workflow automations. “We were interested in the platform automations to increase efficiencies,” said Eddy Perez, CEO & Founder of EPM. “But when OptiFunder ran a back-test to compare actual warehouse allocation and expense data against their decision engine, the data spoke for itself.” OptiFunder offers back-tests, running three months of a lender’s funded loans through its proprietary technology, comparing the lender’s actual warehouse costs versus the cost savings realized through OptiFunder. As IMBs continue to face increased expenses, optimizing warehouse allocation, leveraging rebates/incentives, and managing fees is crucial. OptiFunder’s end-to-end automation for funding activities, wire data checks, collateral shipping, paydown activities, and purchase advice reconciliation boasts additional benefits such as increased workflow efficiencies and reduction in dwell time. Meet with the OptiFunder team at MBA Accounting & Finance or schedule a demo for your own back-test.

Servbank has long had a mission to put the “service” back in “subservicing.” In fact, they like to say they don’t “subservice”, they “over service”. That means Creating Excellence for its clients and customers by providing the highest quality experience, innovative solutions, complete transparency, and superior performance. Servbank puts its money where its mouth is, posting both a 98% customer satisfaction rate and an 83% Net Promoter Score each month for the past 24 consecutive months. It seems like their customers love what they do, and with <1 minute call wait times, 91% first call resolution, and user-friendly self-service options, who wouldn’t? Learn more about Servbank.

To be “on Cloud 9” is to enter a world of endless possibility, which explains why dozens of brands have used the phrase to describe upgraded experiences, from business-class travel to luxury bedding. Now IMBs, credit unions and banks can elevate their operations, too, by upgrading from a self-hosted LOS to a fully cloud-based system like Dark Matter Technologies’ Empower LOS. Just what makes cloud-based better? Read Dark Matter’s latest blog for a revealing look at how lenders can save money when they shed the burden of hosting, managing, integrating, and securing their LOS in-house.

“Are low inventory and high prices making your prospects consider building or renovating? Building and renovating offer excellent solutions to help you achieve the dream of homeownership, especially in the current low inventory market. AFR Wholesale® (AFR) is excited to announce the next session of our ‘Why Wait’ Webinar Series with Fannie Mae scheduled for Wednesday, October 25th at 2 PM EST. Join AFR and Fannie Mae as they delve into the topic of Renovation, with a primary focus on HomeStyle® Renovation. Don’t miss out: Register today! Please note that this webinar will be live, and a recording will not be available, so be sure to sign up in advance. If you're currently a partner of AFR, you can begin utilizing this program immediately. Start building your portfolio with AFR! To get in touch with AFR, visit afrwholesale.com, send an email or call 1-800-375-6071.”

“Remember dumping your Halloween loot on the floor and taking stock of your haul? It was a mixture of Kit Kat grins with raisin box groans. This is how most mortgage lenders feel about their CRM. They settle for a CRM that delivers on some features but misses on others. Lenders know what they want but lack the expertise and resources to create the perfect CRM. OptifiNow is here to say you can have your full-size candy bar and eat it too with OptifiNow Flex, our mortgage CRM platform that is designed to be customized. Imagine a CRM that is integrated into your existing tech stack with the fields, screens and functions that match your sales processes. Best of all, OptifiNow handles all of the design, development and testing. Contact us today to schedule a free CRM assessment and discover how affordable a custom CRM platform can be.”

Verification, flood, and credit reporting products

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Returning from the MBA Annual? Much was discussed about the challenging market and Xactus is committed to helping lenders successfully navigate through it. Here are a few things that can help you in this difficult time. First, don’t forget about HELOCs. With Xactus’ HELOC Verification Services bundle, you can mine leads and identify qualified prospects. You can also better assess risk. In addition, Xactus offers no close, no pay Flood ReportsX that are fast, accurate and compliant. You read that right: if the loan doesn’t get funded, you don’t pay! And the company’s commitment to advancing the modern mortgage is best seen in its proprietary technology, Xactus360. Be sure to request a demo. Follow Xactus on LinkedIn for the latest updates, ways to manage change, and news about important industry innovations.

“As mortgage professionals, we are all passionate about helping borrowers achieve their homeownership dreams. That’s why we’ve created the ultimate resource that will aid you in finding, educating, and qualifying more borrowers and help you make their dreams of homeownership come true. Introducing our new eBook, 12 Ways to Help Your Borrowers Get the Home (and Mortgage) of Their Dreams. Download your free copy today. In this eBook you will learn how you can help more borrowers qualify for a mortgage, find ways to increase your business with happy customers, and see what actions WON’T be valuable to your borrowers (and may even turn them off). Ready to evaluate a better solution for your credit reporting and verifications needs? Contact Birchwood Credit Services today and let us show you what a true credit and verifications partnership really looks like!”

Jumbo, non-Agency, 2nd, and reverse news

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HTL Wholesale introduced its new Jumbo Proprietary Reverse Product, the Platinum Reverse that comes in three variations. Maximum LTV Fixed Rate, Adjustable Rate with a Line of Credit and Reduced LTV with a lower Fixed Rate. The minimum age for the Platinum is 55 in most states, but some require the borrower to be 60 or 62.

Angel Oak’s Closed End Second Loans program enables borrowers to tap into their home’s equity while retaining their first mortgage. Its Stand-Alone Second Lien product is designed for self-employed borrowers and real estate investors who can qualify using 12-24 months of personal or business bank statements. With this product, borrowers receive a lump-sum payment and there are no restrictions on how borrowers can use the funds.

Recent guideline changes at A&D Mortgage open new opportunities and make it even easier for your clients to secure the mortgage solutions they need. A&D Mortgage will waive tradeline requirements for your clients under certain conditions. Additionally, an increased maximum allowable deductible for all required property insurance perils from 5% to 10%, making homeownership even more accessible and affordable.

Kind Lending offers FHA, VA, FHLMC, and FNMA financing for Single Wide Manufactured Housing. Review single wide manufactured housing permissions on Kind Lending website.

Hometown Equity Mortgage announced Foreign National guideline changes. First time investors are allowed. No more Visa needed. DSCR <.75 is acceptable. No credit required, credit references no longer needed and Condotels are eligible.

Finance of America Companies (FOA), parent company of reverse mortgage lender Finance of America Reverse (FAR), announced the expanded roll out of “HomeSafe Second,” its proprietary second-lien reverse mortgage product re-introduced to the market earlier this year. Rolling the product out to an expanded pool of direct retail loan officers and wholesale brokers, the company aims to make the product more widely available to consumers, according to an announcement. Reverse Mortgage Daily reports that “the retail expansion will go to Finance of America’s direct-to-consumer division, [American Advisors Group (AAG)]. On the wholesale side, the loan will be offered to broker partners through the ReverseVision loan origination system (LOS).”

Capital markets: treading water… for now

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The ”higher for longer” interest rate sentiment has dampened the economic outlook and driven up bond yields as of late, but after 10-year Treasury yields were spotted north of 5 percent at times yesterday, the bond markets had a welcomed rally. Fixed-income security prices, which of course include a decent chunk of mortgage-backed securities, have remained under pressure as recent data highlights resiliency throughout the economy. Unlike the runup in yields seen during the Financial Crisis, today’s spreads between the 10-year Treasury and 30-year mortgage are much wider than historical norms. This has pushed 30-year mortgage rates to a 23-year high of 7.6 percent although other sources put the average rate closer to 8 percent.

The lack of homes inventory has been a plague for many months. Existing home sales continue to fall and were at their slowest pace since 2010. Additionally, the slowing pace of purchase mortgage applications suggest they may fall further. Sales of new single-family homes have ticked up as builders rely on rate buydown and other discounts to move inventory. Single-family building permits have risen for eight consecutive months. The Mortgage Bankers Association has recently called on the Federal Reserve to formally announce they have reached the end of the current interest rate hiking cycle as well as to commit to not actively selling their MBS holdings. By providing much needed certainty to the markets, the spread between mortgage rates and treasuries may move back towards historical levels thereby providing much needed relief to the housing market.

Today’s economic calendar is under way with Philadelphia Fed non-manufacturing surveys for October. Later this morning brings Redbook same store sales, preliminary October S&P Global PMIs, Richmond Fed manufacturing and services, a Treasury auction of $51 billion 2-year notes, and a plethora of earnings announcements from Wall Street. We begin the day with Agency MBS prices a few ticks (32nds) worse than Monday’s close and the 10-year yielding 4.86 after closing Monday at 4.84 percent.

There was a Scottish painter named Smokey Macgregor who was very interested in making a penny where he could, so he often thinned down his paint to make it go a wee bit further.

As it happened, he got away with this for some time, but eventually the Baptist Church decided to do a big restoration job on the outside of one of their biggest buildings, next to an old graveyard.

Smokey put in a bid, and, because his price was so low, he got the job. So he set about erecting the scaffolding and setting up the planks, and buying the paint and, yes, I am sorry to say, thinning it down with turpentine.

Well, Smokey was up on the scaffolding, painting away, the job nearly completed, when suddenly there was a horrendous clap of thunder, the sky opened, and the rain poured down washing the thinned paint from all over the church and knocking Smokey clear off the scaffold to land on the lawn among the gravestones, surrounded by telltale puddles of the thinned and useless paint.

Smokey was no fool. He knew this was a judgment from the Almighty, so he got down on his knees and cried: "Oh, God, Oh God, forgive me; what should I do?"

And from the thunder, a mighty voice spoke:

"Repaint! Repaint! And thin no more!”