2.21.24 Significant Others; Sagent's Uday Devalla and Perry Hilzendeger on Servicing Technology; Applications Falling

This week’s podcast is sponsored by Truv. Truv lets applicants verify income, employment, assets, insurance, and switch direct deposits. Unlock the power of open finance, with Truv. 

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There’s an old LO joke, telling their client, “When you’re buying a house, be sure to do it with a significant other, and make sure that one of you has good credit. That’s why it’s called ‘significant’ other: sign-if-i-can’t.” Everyone in our biz knows that owning property is a great way to build wealth, although between elevated inflation, stubborn mortgage rates, and general economic uncertainty (one can argue that the future is always uncertain, right?), it may not feel like the right time to plunge into the housing market. But every LO should know that if past patterns hold true, inflation can actually boost homeownership and people who are living through this time may be more inclined to buy a house in the future! A fine selling point when an originator is speaking with a potential client. (Found here, this week’s podcast is sponsored by Truv. Truv lets applicants verify income, employment, assets, insurance, and switch direct deposits. Unlock the power of open finance, with Truv. Today’s has an interview with Sagent’s Uday Devalla and Perry Hilzendeger on new servicing platforms and technology.)

Employment

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“PrimeLending increased automated underwriting approvals by 15 percent in 2023! How? By verifying positive rent and cash flow uplifts via assets collected through our full-integrated partners. That means fewer exceptions and delays, faster approvals, and more satisfied customers. In fact, PrimeLending reduced loan processing turn times by an average of 10 days in 2023, thanks to integrating third party systems and implementing AI tools. With more time saved, more loans converted and a better customer experience, our LOs are the biggest winners. Ready to put the strength of innovation behind your career? Contact Nic Hartke today to explore opportunities.”

“Analysts are recognizing Citizens as a bank to watch. Citizens was recognized as one of Fortune World's Most Admired Companies in the Super Regional Bank category for the second consecutive year. Chairman and CEO Bruce Van Saun was recently named as one of the Top 10 CEOs in Banking by FinTech magazine. Citizens launched a new Private Bank and hired major national talent to launch its further success. Citizens culture remains strong with 77 percent of its colleagues recommending the company as a great place to work. We are looking for talented retail mortgage loan officers in the Northeast, Mid-Atlantic, FL, and Midwest who are focused on an exceptional customer experience and a passion to build lasting relationships with our customers. Want to learn more? Click here or email Carl Minott.”

“Loan officers! Discover the radius advantage. Are you navigating a market that's forgotten the value of loyalty? At radius financial group, we're rewriting the script with our MLO Partnership-Proposition (MPP). We understand the industry's pulse and the need for a genuine partnership—not just a platform to process loans. As lenders focus on consumers, we concentrate on you, the heartbeat of our business. You're not just a number here; you're the face of our brand, co-branded for success. We're committed to investing in you, providing a stable home where your talents are nurtured and your book of business flourishes. For confidential inquires please contact Carla Herrera (781-742-6500).

Lender & broker services, products, and software

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On Jan. 1, 2024, ICE’s dedicated technology experts rang in the new year by helping 92 mortgage and home equity clients successfully complete all month-end, quarter-end and year-end processing. That’s nearly 52 million active and inactive loans serviced using the industry-leading MSP® loan servicing system processed in under 24 hours. Read more from the mortgage technology experts at ICE to learn what goes into this critical yearly regulatory process and see how ICE helps its clients meet reporting requirements.

In case you missed it, the First American Data & Analytics 2024 Housing Market Outlook webinar is now available to watch on demand. You won’t need to consult your crystal ball to understand the state of the housing market this year… And now you can watch the complimentary presentation when it fits your schedule. Be prepared for what lies ahead and when the housing market rebounds as you learn updates on the health of the U.S. economy, the supply and demand dynamics in the housing sector, affordability challenges, and more. Check it out.

Make your general ledger profitable and run your business more efficiently with Loan Vision and LV-PAM. Instead of “staying alive until ‘25”, with Loan Vision, a software built by the mortgage industry for the mortgage industry, you can “produce more in 24!” Customers on Loan Vision see improvements of 30 percent+ decrease in days to close the books, 20 percent+ reduction in accounting headcount, complete LOS to G/L automation, and improved reporting and visibility. Interested in learning how Loan Vision can help you run a more efficient and profitable company? Contact Carl Wooloff to schedule a call today.

Today’s lending environment is a tough market all around, not just for your production teams. Your marketing teams are also likely spread thinner, frequently asked to do more with less, with increased pressure to not only create compliant marketing, but content that is targeted, localized, and on-brand, all while meeting demanding deadlines. Thankfully, Usherpa is here to help! Partnering with Usherpa will give your sales team access to our award-winning Done-for-You automated content, while providing your marketing team with all the tools they need to efficiently help loan officers make the most of today’s market. Marketing teams can utilize Usherpa’s Launch Pad email engine to create and manage collateral aligned with your unique vision and brand strategies. And our boutique customer service is there every step of the way. What’s more, wouldn’t it be refreshing having monthly local content automatically deployed for your loan officers every month? Check out the current Local Housing Market Video. And schedule a demo today.

Mortgage lenders using Empower, the loan origination system (LOS) by Dark Matter Technologies, rejoice! TRUV and Dark Matter bring consumer-permissioned VOI & VOE to the Empower® LOS, reducing costs by 60-80 percent, accelerating loan cycles, and creating a better borrower experience. TRUV brings the best-in-class coverage and conversion directly from the source to your Empower LOS for income and employment verifications. Ask one of us to see a demo of TRUV in Empower® LOS!

Fun with non-Agency news

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Although the percentage of “non-Agency” volume has always been much smaller than the Fannie, Freddie, FHA, VA and USDA number, these products help round-out any lender’s offerings. Let’s see what’s cookin’.

Fund more loans with Verus, the leading Non-QM investor. With an impressive history of facilitating over $28 billion in funding through 54 rated securitization transactions since it was founded in 2015, Verus has established itself as the predominant non-QM issuer. Whether you’re venturing into non-QM for the first time or seeking to expand your portfolio, trust Verus to deliver deep expertise and flexibility. It offers a range of non-agency loan options for property investors, foreign nationals, self-employed and more that are tailored to your borrowers’ needs. Navigate the evolving market with confidence. To learn more, contact Jeff Schaefer, EVP – National Sales at 202-534-1821.

Top-notch pricing, loan amounts up to $3 million, and a clear path to homeownership victory. The Plaza Home Mortgage® Jumbo Champion loan program provides these great perks for your borrowers. Check out the highlights: FICOs from 720, eligible for High Balance loan amounts, LTV up to 80 percent, available for Purchase, Rate/Term, and Cash-out, applicable to primary, second home, and Investment property, suitable for SFR, Condo, Co-op, PUD, and 2-4 units, choose from 20, 25 & 30-Year fixed options. Also available: 7/6 & 10/6 SOFR ARM.

Pennymac Correspondent is updating its AUS Jumbo program, effective immediately. For details, view PennyMac Announcement 24-05.

Angel Oak’s Bank Statement Home Equity Line of Credit (HELOC) is a HELOC designed specifically for self-employed bank statement borrowers, tapping into their home’s equity while retaining their first mortgage. The HELOC is a revolving line of credit and borrowers can pay down as little or as much of the credit line as needed. Not looking for the flexibility of a HELOC? Angel Oak also offers a fixed rate, stand-alone Closed End Second Mortgage product designed specifically for self-employed borrowers and real estate investors. This product allows borrowers to receive a lump-sum amount that fully amortizes according to the terms of the loan.

On the East Coast, First Home Mortgage Corporation announced the launch of the “groundbreaking new First Home ONE Program, which enables qualifying buyers to purchase a home with 3 percent equity, but only 1 percent down payment. The buyer must contribute 1 percent and First Home Mortgage will contribute 2 percent (up to $5,500) towards the down payment and/or closing costs. This transformative initiative greatly expands access to homeownership through competitive funds and flexible terms and represents the next step following the introduction of First Home's Dream Program.”

LoanStream Mortgage MaxONE & MaxONE Plus DPA now has a Buydown Option. Plus, manual underwrites are now allowed and there is no maximum income restriction on the program.

2024 is shaping up to be a significant year for Angel Oak Mortgage Solutions. Recently bringing one of the first Bank Statement HELOCs to the marketplace designed for self-employed borrowers, the Bank Statement HELOC is a revolving line of credit and borrowers can borrow as much of the approved credit limit needed during the draw period. Another new product is the 1-Year Self-Employed Bank Statement. Ideal for self-employed borrowers with just 1 year of business history. Available for purchase, rate and term and cash out refinance.

Angel Oak Mortgage Solutions guideline enhancements include maximum loan amounts increased to $750,000 on primary residences on Closed End Second Mortgage.

Platinum Jumbo’s minimum loan amounts reduced to $150,000 for this full doc "just missed" prime jumbo program.

Angel Oak Mortgage Solutions DSCR Loan Enhancement is now an acceptable income source using AirDNAs property earnings report. The market score must be greater than or equal to 70. The occupancy rate must be greater than 65. Angel Oak Mortgage uses 100 percent of AirDNAs Projected Revenue from this report.

Quontic Wholesale accepts 100 percent gift funds for down payment and closing costs on all loan programs. And Quontic offers a Lite Doc Program for borrowers facing income verification challenges. “With no W2s or tax returns required and unaudited income verification options, moving on from No Ratio can be a breeze.”

Capital Markets: apps continue downward as Fed ease talk… eases

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This is nearly a non-story at this point, but the MBA reports that the total number of loans now in forbearance decreased by 1 basis point from 0.23 percent of servicers’ portfolio volume in the prior month to 0.22 percent as of January 31, 2024. “According to MBA’s estimate, 110,000 homeowners are in forbearance plans. Mortgage servicers have provided forbearance to approximately 8.1 million borrowers since March 2020.” The long-awaited disaster that some had predicted in the United States real estate market failed to materialize.

There’s no patience in the markets. And that’s a shame because after betting on lower rates in 2024, investors are starting to wonder if the Fed’s next move will actually be up, not down. Recent Fed rhetoric may suggest that rates are sufficiently restrictive, but inflation is proving to be sticky amidst a resilient labor market. Pricing in fed funds futures now suggests the first of four 25 basis point rate cuts this year will happen at the June 28th FOMC meeting, nearly in line with the Fed’s dot-plot projections from mid-December.

Looking for more insight into when the Fed is going to start cutting rates? Investors will receive more clues into the Fed’s thinking with the release of the minutes from January’s Federal Open Market Committee (FOMC) meeting this afternoon. The minutes are expected to clarify how much more data indicating inflation is falling the Fed’s policymakers want to see before starting to reduce interest rates, as well as the discussion planned for the upcoming March FOMC meeting about slowing the pace of the Fed’s balance sheet reduction.

The CPI report last week caused traders to walk back their bets on rate cuts this year, and the PPI components that feed directly into Core PCE should see further headwinds before falling. Chair Powell remained vague at his press conference following the January decision about what exactly the Fed’s preconditions for cuts are, suggesting FOMC members still disagree about the issue.

In terms of price action, bond markets began this holiday-shortened week with a slight rally on a lighter day for the economic calendar, which only featured the release of Leading Indicators. The Leading Economic Index fell in January, making for 23 months that this composite of leading indicators warned of an economic downturn that has yet to materialize. There has been good news for Americans, though.

Last week we learned that consumer sentiment ticked up again, while broader goods prices and energy continued to fall. Year-ahead inflation expectations ticked up to 3.0 percent, still within the pre-pandemic 2.3 percent to 3.0 percent range. However, longer-term inflationary expectations remained at 2.9 percent, which is still above the pre-pandemic range of 2.2 percent to 2.6 percent. Keep in mind that this week ahead will feature a lot less economic data than last week.

With mortgage rates moving back above 7 percent last week to return to the highest levels since mid-December, today’s economic calendar kicked off with mortgage applications decreasing 10.6 percent from one week earlier, according to data from the Mortgage Bankers Association’s Weekly Mortgage Applications Survey. Fed speakers, the aforementioned minutes from January's FOMC meeting, and Treasury supply comprise the rest of the calendar. Atlanta Fed President Bostic and Fed Governor Bowman will both deliver remarks before the minutes from the January 30/31 meeting are released in the afternoon. Regarding supply, the Treasury will auction $60 billion 4-month bills, $28 billion reopened 2-year FRNs, and $16 billion 20-year notes. We begin the day with Agency MBS prices a few ticks (32nds) better than Tuesday evening, the 10-year yielding 4.25 after closing Tuesday at 4.28 percent, and the 2-year yielding 4.58.

The barman says, “We don’t serve time travelers in here.”

A time traveler walks into a bar.

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, “It’s 2024: Do You Know Where Your Servicing Is?” 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 2024 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.)