11.20.23 Home Equity; Sticky Inflation; Quiet Economic Calendar

Candor’s patented automated underwriting decision engine, CogniTech™, is a state-of-the-art, 100% machine platform that can handle infinite loan scenarios.  The portability allows clients to plug in the technology wherever an underwrite happens during the loan lifecycle, from point of sale to servicing. Clients can instantly scale to match loan volumes, improve quality to mitigate repurchase risk, & boost liquidity. Candor Can Do

Transcript

When you own your own home, you don’t have to deal with unreasonable landlords. (Warning: uncensored.) And then there are those who own their own homes that have no mortgage: almost 40 percent of Americans own their places outright, an all-time high. Do you think that you could live in 200 square feet? There are tiny homes, and then there is this place that kind of folds up! (Thank you to Arch’s Sharon K. for sending this along.) Meanwhile, among lenders there are many reports of, what is in effect, pick-a-pay, when the “referral” source is moved within the company. LO comp is still an issue, as brokers can have different comp plans but LOs can’t. Pre-approvals and pre-quals off the chart, but there is no inventory. Multiple bids are occurring in many areas and price points. In the wholesale channel, smaller companies can’t out-price the “big guys,” so instead are focusing on service and products. And here come the holidays! (Today’s podcast can be found here, sponsored by Candor. Candor’s patented automated underwriting decision engine, CogniTech, is a state-of-the-art, 100 percent machine platform that can handle infinite loan scenarios. 

Company wanted

_________________________________________________

A veteran group of mortgage bankers is interested in purchasing a small wholesaler in good standing and that has its “tickets” with Fannie, Freddie, and Ginnie. Loan production volume is not a priority. Interested parties should send me a confidential note for forwarding.

Lender and broker software, products, and services

_________________________________________________

Are you struggling with declining production volumes and increasing costs per loan? Look no further. Outsourcing accounting is the elegant answer to this common challenge faced by independent mortgage banks. Whether you lack accounting expertise in-house or have a new team with no mortgage experience, the Richey May Client Accounting and Advisory Services (CAAS) team is here to provide the support you need. Our team consists of industry experts who can customize a solution to meet your specific needs in this volatile time, without requiring any additional training. Whether you need help transitioning to loan level accounting, a fully outsourced function, or industry training for your controller, we've got you covered. Contact Richey May today!

“In this market, hustle is everything. You can’t afford to waste a single deal, or a single minute. That’s why ReadyPrice has launched Shop, Lock, Deliver, an innovative platform designed to help independent mortgage brokers and their lenders save time and money. Now you can shop competitive loan offerings from multiple lenders, get rate lock guarantees in real time, receive underwriting findings, and deliver the borrower’s complete loan file to lenders, all on a single platform, at no cost to brokers. It’s already helping brokers around the country thrive and compete in the toughest market. Multiple lenders. One platform. Zero b.s. Come check us out today.”

Fall into a bigger Pipeline with November Specials from LoanStream Mortgage! Here for a limited time through November 30th, 25 BPS off Non-QM, Conventional and Government loans. Talk with your AE to learn more or visit here for details.

Marketing, servicing retention, & lead source products

_________________________________________________

Why focus on refinances, you ask? With the constrained refinance market, lenders need to look beyond the standard methods of identifying potential candidates. A subset of homeowners continue to turn to cash-out refinances, especially those with more modest credit scores, lower first-lien balances, and those looking to withdraw larger sums of equity. Currently, $10.6 trillion is available for homeowners to borrow against while maintaining a 20 percent equity stake in their homes. In August, 90 percent of borrowers raised their interest rate by 2.34 percent, on average, demonstrating that simple “in the money” analytics are missing this market almost entirely. Optimal Blue’s CaptureSM lead analytics platform helps identify specific loans in your portfolio or lead database that could benefit from refinancing based on equity positions and current first-lien rates. Put near-real-time, personalized pricing scenarios within reach to engage the right customers with actionable information at the right time. Get started today.

“OptifiNow gives thanks to our clients, who have allowed us to be a big part of their CRM success. Unlike most CRM vendors, OptifiNow includes White Glove service with every CRM implementation. We meet with our clients continuously and perform virtually any task they need: building webhooks, creating automation triggers, even developing entirely new features and integrations. We know that lenders need more than CRM technology to be successful, they need a partner that will help them ensure their CRM stays relevant, useful, and effective. That’s what OptifiNow’s White Glove service does. If you’re frustrated because you don’t have the resources to manage a CRM on your own, contact OptifiNow. We deliver CRM success.”

“Permissionize Revolutionizes Servicing Retention! Permissionize presents a unique servicing retention strategy that is financially viable. This technology automates retention programs by alerting the servicer when borrowers fill out a webform, enabling re-engagement with current clients before they start the application process. Permissionize “listens” 24/7 for signals when a phone number is input in a webform. Leverage your established business relationship, drive inbound traffic to your call center, no opt-in needed. This new technology changes everything we know about how to view servicing retention. John Lomanno, mortgage industry veteran, states, “We are revolutionizing the servicing industry through automation by providing a cost effective, extremely reliable way to get in front of your customer when they go online.” Contact us to witness how our trailblazing technology changes everything you thought you knew about servicing retention.”

Training & webinars this week and next and beyond

_________________________________________________

Yes, Turkey Day is only a few days away: time flies.

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

Tomorrow, Tuesday, 11/21, is the next Mortgages with Millennials with Kristin Messerli and Robbie Chrisman. Tune in every Tuesday at 1PM ET 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.

Our very own MBA has some webinars. NMLS Mortgage Call Report (MCR) Version 6 – What You Need to Know | MBA, November 21. (Also coming up are Community Reinvestment Act: Final Regulations and What Banks Need to Know Now | MBA, November 28, and California's Corporate Climate Data Accountability Act | MBA on December 14.)

Wednesday, 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. Listen to a unique mix of age perspective, expertise, and charisma to the screen, ensuring that the information is not only educational but also entertaining. This week's episode features Taylor Stork!

Arch MI’s monthly webinars cover all the topics that mortgage professionals need to start preparing for 2024. Arch MI November training topics include Analyzing Appraisals for Single-Family Residences. Business Tax Returns 301-Unique Considerations for Sole Proprietorships and Corporations. Business Tax Returns 302-Unique Considerations for Partnerships and S Corporations. Loan Processing Using the URLA/Form 1003. Master the Mystery-Navigating and Evaluating Personal Tax Returns.

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.

PRMG announced the release of the Closed End Second products to the wholesale and non-delegated correspondent channels. An on-demand webinar can be found on PRMG University's YouTube Channel or you can attend November 28th, 11:00 AM / 2:00 PM Eastern.

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 28, 3 –4 p.m. ET: Uses of Historical Data for Stakeholder Analysis. Tuesday, December 12, 3–4 p.m. ET: Sequencing of Project Milestones (cont’d).

In conjunction with the Mortgage Bankers Association, Orrick attorneys Warren Traiger and Victoria Freitag will hold an in-depth discussion on the effects of these new regulations. The Tuesday, November 28, 12:00 – 1:00 pm PT, 2:00 – 3:00 pm CT  session will cover compliance and enforcement issues, the categories of lending included under the rule, important timelines for data collection, reporting and more. Use the code ORRICK100 at checkout for complimentary registration.

On November 28th is a CRN event in Sarasota, FL. “We have perhaps the best line up of speakers ever. Anyone may attend. Both Fannie and Freddie will be presenting on New UAD. If anyone needs a deep dive into what’s coming this is the event to attend. And Mark Palim, Fannie Mae’s Deputy Chief Economist will give us a preview of what’s yet to come. Every single speaker will be addressing extremely important topics that will impact your business over the coming months. And if the economics scare you, perhaps the Artificial Intelligence conversation will lift your spirits. Come learn what AI can do to take your business to the next level.”

The NMP Webinar, "How to Have a Profitable Mortgage Business at Any Volume with AI," is scheduled for Thursday, November 30, 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.

Register for Angel Oak’s Closed End Second Loans webinar, November 30th, 1PM ET. Angel Oak’s 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. These loans enable borrowers to tap into their home’s equity while retaining their first mortgage. With this product, borrowers receive a lump-sum payment and there are no restrictions on how borrowers can use the funds.

Friday, December 1, is the next episode of The Mortgage Collaborative’s Rundown covering current events in the mortgage market for 30-45 minutes starting at noon PT, 3PM ET, in “The Rundown”.

Capital markets: perhaps a quiet holiday week

_________________________________________________

Secondary Market Leaders are trying to find basis points wherever they can. Consider AFR Wholesale® (AFR) for your Mandatory Bulk Bids. We’ve seen considerable growth in 2023 and clients can expect to gain a competitive edge with access to more favorable pricing terms, efficiency, and an expedited and more efficient process by seamlessly integrating with AFR’s point of sale systems. AFR is also integrated with Resitrader and BAM Marketplace. You can also enjoy the convenience of direct communication by submitting your bid tapes to AFR’s attentive team via bulkbid@afrwholesale.com. AFR is here to help you maximize your profits and help your business grow! And in this season of Thanks, we would like to thank all of our trusted partners! Happy Thanksgiving to you and yours! New to AFR – Partner Today! Visit www.afrwholesale.com, email sales@afrwholesale.com, or dial 1-800-375-6071. Feel free to have us shadow bid on any of the above-mentioned platforms! 

Fed officials over the past few weeks have dutifully tried to temper expectations, cautioning that sticky inflation could mean more tightening. However, with more bets signaling that the central bank is done hiking interest rates to rein in inflation, we’ve had a big November rally, and with it a drop in rates. And even without a single Fed policymaker dissenting over policy tightening in the central bank’s last 11 meetings, an unusually long stretch, some of the more optimistic investors are putting wagers on a rate cut for early 2024. A chorus of Fed speakers have held the line in “wait and see” mode, even with new data indicating price surges are ebbing and the economy slowing just as the Fed intended.

Diving into the weeds, data released last week indicated that persistently high inflation could finally be easing. The producer price index showed a 0.5 percent decline in October when it was expected to increase slightly. The reading marked the most significant fall in the index since April 2020. Additionally, October’s consumer price index reading also came in lower than forecast. The core consumer price index, which excludes food and energy, fell to a two-year low of 4 percent on an annual basis.

More germane to this Commentary, Friday’s release of October’s housing starts (up 1.9 percent month-over-month to a 1.37 million annual rate) and building permits (up 1.1 percent month-over-month to a 1.49 million annual rate) data revealed that both were stronger than expected as home builders and multifamily developers appeared to shrug-off higher interest rates during October. The mix of housing starts continues to shift from multifamily to single family as there is a glut of apartments under construction and multifamily commercial real estate is becoming an issue, even with an inventory gap. Builders are actively responding to increased rates by employing various incentive strategies.

This Thanksgiving-interrupted week includes an early close on Friday and is relatively light on data. Markets will receive leading indicators, Fed surveys, existing home sales, durable goods orders, and Michigan sentiment. No Fed speakers are currently scheduled, though the minutes from the Oct 31 / Nov 1 FOMC minutes will be released tomorrow afternoon. Besides usual bills, Treasury auctions will consist of $16 billion 20-year bonds today, then $26 billion reopened 2-year FRNs along with $15 billion reopened 10-year TIPS tomorrow. Today’s sole data point is leading indicators for October. (Expectations are for another decline of 0.7 percent month-over-month, same as September.) The U.S. Treasury then auctions the aforementioned $16 billion 20-year bonds in the afternoon. After the 10-year yield closed last week at its lowest level (4.44 percent) since September, we begin this week with Agency MBS prices worse about .125, the 10-year yielding 4.48, and the 2-year at 4.91.

This Thursday don’t fall for this prank. Or the ol’ pregnant turkey prank!