11.13.23 Loan Officer Survey; Loanspark’s Michael Barnett on Commercial Real Estate; Credit Trends

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.

Transcript

Whether it is an obscure band or an eatery in San Diego, a well-known palindrome is “tacocat.” Huh? Yes, it’s the same spelled backward or forward. You hadn’t heard that one? How about this one: “Rob, have you heard that when Lender XYZ funds a loan, it is sold to an investor, and usually the servicing is sold to someone else, but then Lender XYZ and its LO quickly offer to refinance the loan when rates drop. At that point Lender XYZ makes its origination fee again, and the investor and servicer lose out.” Yes, it’s everywhere as originators and lenders scramble for business. Current and previous clients are good sources, as other sources are tough to find: With the NAR verdict in Missouri being a sign of the times, where are LOs supposed to go for referral sources if not the buyer’s agent in the future? (Today’s podcast can be found here, sponsored by LoanCare, the mortgage subservicer 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 Loanspark’s Michael Barnett on the commercial real estate space and why residential mortgage professionals should care about it.)

Employment

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Kind Lending is seeking a candidate for the position of Director of Non-QM. As Director, you will be responsible for spearheading the growth of our non-QM division. The ideal candidate will have a deep understanding of non-QM lending, and a proven track record of success in the industry. In this role, you will be responsible for program pricing for multiple channels, loan sales, trading, and hedging, overseeing analytics and pricing engines, as well as margin management and reporting for non-QM production. “At Kind Lending, we pride ourselves on providing our partners and customers with the best possible mortgage lending experience. As the Director of Non-QM, you will play a key role in achieving this goal. If you are a motivated and experienced professional looking for a new opportunity, we encourage you to apply today: Click here to learn more about this opportunity!

Lender and broker software, products, and services

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Most schoolchildren learn about Laika, the first dog in space. But our cat Myrtle wants to share a lesser-known fact: in 1963, for the first (and only) time in history, a feline was launched into space. Like her fellow space program participants, Félicette was a trailblazer. Now, 60 years later, Dark Matter Technologies is invoking that same pioneering spirit in its quest to shape the future of lending under new leadership and new investments in its flagship Empower LOS. Learn more about Dark Matter’s bold new vision.

The end of the year is near, now is the time to schedule your firm’s 2023 MERS Annual Review and e-Annual Report with TENA! Every MERS member is required to complete a MERS Annual Report Review. If on March 31, 2023, your firm’s count of active MINs was 1,000 or more, then the 2023 MERS Annual Report Review for your firm must be completed by an independent third party, with the results submitted to MERS not later than December 31st. To ensure your review is completed in time, you must provide TENA with all of the necessary documentation by December 1st. Get started now to avoid the last-minute rush! To ensure that your firm is in compliance, contact TENA today to initiate your firm’s 2023 MERS Annual Report Review. TENA also offers a full range of MERS reviews, including MERS Data Reconciliation and MERS Document Reviews. TENA Companies, Inc. has been the mortgage industry’s trusted source for Mortgage Quality Control Audit Services and Software since 1982.

The weather may be cooling off, but LO competition never does. While MMI’s recently released Mortgage Industry Benchmarks report found the average LO production volume to be $1.1M in September 2023, LOs in the Unicorn Tier ($100M+ production/year) averaged nearly 10x that volume. Want to see how you stack up? Sign up now! Released monthly, MMI’s Mortgage Industry Benchmarks newsletter lets lenders and LOs compare their recent performance to their peers via production-based tiers. Are you leading the competition or falling behind? There’s only one way to find out. Subscribe today.

Given the rise in housing costs and persistent interest rate environment, down payment assistance (DPA) has become more important to borrowers than ever. SmartBuy, Click n’ Close’s suite of DPA products has helped over 4,000 borrowers and counting, with an average of nearly $10,000 in assistance per transaction. SmartBuy has no income limits and other innovative features, such as a repayable option with a 30-year amortization, a 2-1 buydown and options for manufactured homes. With private funding and a wealth of mortgage expertise, Click n’ Close remains a stable, reliable source of DPA financing to help meet your borrowers’ needs. Reach out to our wholesale (Adam Rieke, Kerry Webb and Soliman Martinez) or correspondent team (Julas Hollie) to learn more.

NEW exclusive data: Introducing Maxwell’s 2023 Single Women Home Buyer Report. Did you know that women who take on mortgages solo have grown dramatically to now transact almost a fourth of home purchases? Despite their rise, this demographic tends to feel uneducated about loans and dissatisfied with the lending process. Mortgage solutions provider Maxwell surveyed 1,000 single women home buyers to dig into these borrowers’ goals, challenges, and lending preferences. Some of the findings are surprising: For instance, single women are 50 percent more likely than their male counterparts to choose a local lender. Want to learn more, and become the go-to resource for this growing segment? Click here to download Maxwell’s 2023 Single Women Home Buyer Report.

Last week Symmetry Lending rolled out enhanced broker fees on their Stand-Alone HELOC, now offering 1.5 percent on the draw amount, with no maximum! This enhanced fee structure offers a big opportunity to increase income and business while new home purchases remain slow. So, it’s the perfect time to offer this solution to your clients! With lots of HELOC providers on the market, why should you choose Symmetry over the rest? Service: Symmetry’s service model is built to deliver an exceptional experience to MLOs and their clients, time and time again. Speed: A dedicated loan origination team is committed to delivering industry-leading turn-times. Simplicity: They perform the heavy lifting of the submission process in the background, so loan officers can focus on their clients. Visit Symmetry’s website or contact your Area Manager to learn more about what differentiates Symmetry from other HELOC providers.

“Are you interested in saving money? It’s that time of the year again when Captain Compliance takes on the superhero task of auditing the next subservicer, scheduled in the first quarter of 2024! Interested in saving? Check out our 2024 Sub-servicer calendar and sign up by the end of the year to save! Sounds super, right? Schedule a conversation today to speak with our superb superhero sales team!”

The Loan Vision team is excited to attend the MBA’s Accounting and Financial Management Conference! Stop by table 2 in the Exhibit Hall to learn how companies that run Loan Vision show a 25 percent reduction in OPEX/time to close, a 20 percent reduction in overall accounting headcount, complete LOS to G/L automation, and improved reporting and visibility that allow for better business decisions. Be sure book time with Carl Wooloff here to get an early introduction to our newest product, that focuses on allowing our customers to be more profitable with less volume; LV-PAM, a modeling tool that provides actionable intelligence with consolidated loan data. Loan Vision’s innovation continues to provide you the “insights you need in the software you trust.”

Events & training today and tomorrow

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(Yes, I know this one is at the end of the month.) In a market where tight liquidity reigns and banks are faltering, clinging to old habits will only hinder your progress. Break free from the status quo with the NMP Webinar "How to Have a Profitable Mortgage Business at Any Volume with AI," scheduled for Thursday, November 30, 2023, at 2:00 PM ET / 11:00 AM PT. Pavan Agarwal, CEO of Sun West, will guide you through this transformative session, revealing how their loan officers are thriving amidst these challenges by harnessing proprietary AI technology. Unearth the transformative power of AI in mortgage lending. Learn strategies to halve declines and double closings, witness the rapid pace of AI-assisted loan processing, and see the stark contrast between Sun West's AI-driven methods and conventional practices. This webinar is essential to evolving your business practices in an uncertain market. Elevate your career with innovative AI solutions and join us by clicking here.

A good place for longer term conference planning is to start is here, and click on “events” for conferences in the future.

CoreLogic's next DC Government Forum is today, November 13th, 9am - 4pm with Reception from 4pm - 5pm.

SitusAMC MSR Monthly Snapshot upcoming November 13th Webinar. If you register, even if you are unable to attend the live webinar, you will receive a link to the webinar deck and recording.  Insights from our valuation analysis, risk management and transaction advisory work in the last month. Critical data points and commentary for your month-end reporting and your strategic decisions.

The California MBA invites you to participate in its first Attainable Housing Summit being held on November 14th. This event is designed to share information with real estate professionals and potential homeowners as to products and programs that are available to help Californians achieve the dream of homeownership. Your company may participate by securing an exhibit table at this event, free of charge, to share information on your company's products, programs, or services. Event speakers include representatives from Freddie Mac, Guild Mortgage, Clayton Homes and CalHFA.

Courtesy of NAMB and AXIS Appraisal Management, tomorrow, November 14th, at 12 noon PST, join Michael Simmons in conversation with Chief Appraisers James Heaslet @ the VA and Mike Schnetzler @ USDA while they explore the reasons behind a “re-languaging” taking place in appraisal reports, the evolving world of ADU’s, and how to navigate the new real estate lending landscape. Bring your questions and be part of the solution.

Get to know Freddie Mac Single-Family leadership team in a Fireside Chat on Tuesday, November 14, 11:15 – 11:45 a.m. ET with Sonu Mittal, head of Single-Family Acquisitions, and Ravi Shankar, head of Single-Family Portfolio and Servicing. Learn about Freddie Mac’s priorities for helping Seller/Servicers succeed and hear these leaders’ perspectives on housing-market stabilization in difficult economic times.

Tuesday, 11/14, is the next Mortgages with Millennials with Kristin Messerli and Robbie Chrisman. 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. Special guest Jordan Nutter, VP of the Influencer Division at NFM.

In support of the Credit Score and Credit Reports Initiative, FHFA will host a series of stakeholder forums. The initial topics will focus on the historical credit score files and the timing/sequencing of key project milestones. To register for any of the sessions outlined below and to stay up to date on future discussions, send your name, affiliation and contact information to CreditScores@fhfa.gov. Forum Schedule: Tuesday, November 14, 3-4 p.m. ET: Sequencing of Project Milestones. Tuesday, November 28, 3 –4 p.m. ET: Uses of Historical Data for Stakeholder Analysis (cont’d). Tuesday, December 12, 3–4 p.m. ET: Sequencing of Project Milestones (cont’d).

Join OMBA at Royal Oaks Country Club, Tuesday, November 14th, 4:00 pm - 6:30 pm for How to Win Builder Business - Happy Hour to Connect & Collaborate. Nicollette Chapman, Senior Vice President of the mortgage division at Zonda, Nicollette delivers a powerful and impactful class about the current state of the housing market, the new construction market, local updates, and how to secure more builder business, all backed by Zonda's data. Learn practical strategies to help grow your originations and close more loans with builders.

MBA of Eastern PA is offering a live session on USDA Rural Development Program Underwriting, Processing and Origination, November 14th from 1-5pm ET. The USDA 502 Guaranteed Loan Program provides $0 down payment financing to low-to moderate-income borrowers in eligible rural areas. Knowledge of the guidelines is fundamental to properly underwrite, process, and originate USDA loans.

FreddieMacCONNECT is Single-Family's premier annual event that provides an opportunity to network with industry leaders and peers while learning more about Single-Family’s latest policies, products, and solutions. FreddieMacCONNECT’s free, November 14-15 virtual conference sessions will focus on helping you successfully grow and manage your business leading to better outcomes for you and your customers.

Join LoanStream Mortgage on Tuesday, November 14th at 11:00 PT for an in-depth review of the Closed-End Seconds programs and how you can maximize your clients borrowing potential. Plus, a review on how to price and how to submit these types of loans.

Capital markets: a thorough look at credit trends

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Join MCT on November 16 for an industry webinar on The Great Inflation vs. 2024: Analysis & New Tools for the Current Market. In this webinar, Phil Rasori and Andrew Rhodes will share analysis on the current market, comparison to relevant historical precedent, and new MCT software functionality to equip lenders in this challenging market.

“Every lender wants to be more profitable, and at Optimal Blue, we’re in the business of making that possible, from pricing, to hedging, to trading, and beyond. Our latest white paper explores practical ways you can start boosting profitability in your hedging and trading processes. From aligning your front-end pricing to your actual execution marks, to incorporating hedge cost on the branch or loan officer level: Experts Steve Baselice and Mike Vough offer best practices that can set up your secondary operations for greater success. Learn more in Optimal Blue’s complimentary white paper: ‘10 Best Practices for Hedging and Trading.’”

Despite the Fed pointing to progress, consumer sentiment fell for the fourth straight month to its lowest level since May, according to the University of Michigan Consumer Sentiment Survey. Inflation expectations are now at the highest level since 2011 as concerns over high borrowing costs and the overall economic outlook are dominating consumers' thoughts, the type of indication that will keep the Fed entertaining the thought that further tightening may still be necessary. There was a divergence in sentiment amongst income groups, with higher income groups improving based on asset prices, while lower income groups degrading due to inflation. Rising pay and a rebound in the stock market may be a salve in the future.

Importantly, the year-ahead inflationary expectations ticked up from 4.2 percent to 4.4 percent, indicating that the jump in October from 3.2 percent to 4.2 percent (largely due to gasoline prices) wasn’t an outlier. Consumers expect prices will climb at an annual rate of 3.2 percent over the next five to 10 years, up from 3 percent a month earlier.

Last week also saw the release of the Senior Loan Officer Opinion Survey on Bank Lending, or SLOOS, which is a survey conducted by the Federal Reserve to gather data on current lending standards. Over the last three months, banks have tightened credit standards for commercial and industrial firms as well as for households, aside from government residential mortgages. This quarter’s survey also included questions around credit card and auto debt.

While not surprising, banks reported being less likely to approve such loans for borrowers with FICOs lower than 680 and were about as likely to approve loans for borrowers with FICOs greater than 720. The rationale cited for the changing standards was a less favorable economic outlook, funding costs, deterioration in credit quality, and a lower tolerance for risk. Despite the contraction in bank appetite for these types of loans, the Federal Reserve’s consumer credit report showed consumer debt increased at an annualized rate of 8.6 percent in the third quarter. Many consider the growth of credit card debt to be an unsustainable source of consumer spending that will eventually need to slow or reverse which could then lead to a slowdown in economic activity.

Following last week’s relative light calendar in terms of data, this week is loaded with market moving potential including CPI tomorrow, PPI, retail sales, and business inventories on Wednesday, and import prices, industrial production, and capacity utilization on Thursday. There is also another lengthy list of Fed speakers. Meanwhile, the U.S. government faces another potential shutdown on Friday, November 17.

The consumer price index report for October will be a key event next week as investors look for direction with interest rates, especially after Federal Reserve Chairman Jerome Powell said at an International Monetary Fund conference that the Fed would not hesitate to tighten monetary policy if the data supported a hike. While markets are pricing in less than a 20 percent probability of a December rate increase, a stronger-than-expected CPI report or hot retail sales print could reset expectations.

But the economic calendar kicks off the week slowly with only Fed Governor Cook delivering remarks and the October budget statement in the afternoon with the CBO expecting a $65 billion deficit compared with a $87.9 billion surplus in the prior fiscal year. We begin the week with Agency MBS prices roughly unchanged from Friday, the 10-year is yielding 4.63 after closing last week at 4.63 percent, and the 2-year is back up to 5.04.

We’re coming up on the holiday travel season, so let’s skip the usual humor or trivia and put out some advice from a retired flight attendant who flew for 35 years. Just because delays and computer glitches haven’t been in the news lately doesn’t mean they won’t happen again. (Part 1 of 4.)

1. If your destination is less than 7 hours, drive.

2. Download and use the app of the airline you are flying. You can do everything on it - get your boarding pass, track your bags, see your incoming plane, and change flights. It sure beats waiting in the long line to talk to an agent! Trust me, usually these apps will tell you a flight is cancelled before the crew even knows!

3. Fly much earlier than you need to. A whole day early if it’s important!! People miss important things like weddings, funerals, cruises, international connections, and graduations. The tears were very real, for very real reasons, and there was nothing I could do! If you must be somewhere, spend the extra money, go a day early. Have a glass of wine and stay in a hotel, enjoy your night not being stressed while everyone else misses their events.

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, “Listening to Real Estate Agents Can Pay Off for Originators”.  The Commentary’s podcast is live and at any place you obtain your podcasts (like Apple or Spotify).

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(Market data provided in partnership with MBS Live. For free job postings and to view candidate resumes visit LenderNews. This newsletter is for sophisticated mortgage professionals only. There are no paid endorsements by me. For up-to-date mortgage news visit Mortgage News Daily. For archived commentaries, or to subscribe, go to www.robchrisman.com. Copyright 2023 Chrisman LLC. All rights reserved. Occasional paid job & product listings do appear. This report or any portion hereof may not be reprinted, sold, or redistributed without the written consent of Rob Chrisman.)