8.26.24 Maturing Commercial Loans; Rate’s Ryan Ogata on Reverse Lending; Upcoming Economic Releases

Thank you to EarnUp and its new AI Advisor tool. The industry’s first-ever context-aware conversation agent instantly analyzes users’ real-time banking and credit data to answer complex financial questions and provide tailored product recommendations. 

Transcript

A pair of scissors is not trivial. Did you read the story on how thirty-six flights were cancelled, and 201 delayed, at a Japanese airport after a pair of scissors went missing in a store near the boarding gates? For me, the last few weeks have included my share of flight delays, and have included time in Michigan, Florida, and Northern & Southern California (arguably two different states) being focused on residential lending. But a side topic is commercial lending, and the challenges landlords, and therefore lenders, are facing. Per our MBA and other sources, over $900 billion of commercial loans are maturing in 2024. A big challenge for those in that sector as companies and individuals came to the realization, during the pandemic, that people need a place to live but not necessarily a place to work. Ever heard of Trimont? Me neither, but at $640 billion it is the largest commercial loan servicer. (Today’s podcast is found here and this week’s is sponsored by EarnUp and its new AI Advisor tool. The industry’s first-ever context-aware conversation agent instantly analyzes users’ real-time banking and credit data to answer complex financial questions and provide tailored product recommendations. Hear an interview with Rate’s Ryan Ogata on helping loan officers’ grow their business by adding reverse as a new business extension for them.)

Employment

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A family-owned, mid-sized, direct lender with a strong industry reputation is seeking a Director of Retail Sales to join their leadership team. This role will report directly to the CEO and will play a key role in orchestrating continued growth within the organization through the recruitment and management of Retail Branches. This role is ideal for a motivated leader who wants a seat at the table along with the opportunity to make a difference and grow with the company.  To take the next step in your career, forward your resume to Chrisman LLC’s Anjelica Nixt. 

In the Northwest and California, Banner Bank is searching for Mortgage Loan Officers looking to create lasting Realtor and builder relationships at a bank focused on the market today. Banner has opportunities for lenders looking for local decision making with FHA, VA, USDA, state bond and true Portfolio lending opportunities along with servicing retained Fannie and Freddie loans to assist in client retention. Additional highlighted products cover CRA lending with private label no payment down payment assistance to help assist all borrowers with the right opportunity. Banner is the right fit for an established team, or the individual looking to grow their business and take the next step in their career. Please send resumes to Aaron Miller.

“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 and broker software, services, and loan programs

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Mortgage Investors Group (MIG) achieved 100% VOIE conversion improvement with Truv. MIG was facing rising costs of verification of income and employment and decided to make a change that led to 80% cost savings and 100% conversion improvement. “It’s really about partnering with somebody in the future you can trust, is going to save you money, protect your company, and make the customer experience better. And Truv checks all those boxes,” JR Huber, EVP of Sales and Production. Hear how they did it. Watch now!

Maxwell’s newly released Q2 2024 Mortgage Lending Report sheds light on current lender challenges and the home buyers driving volume in today’s market. In Q2, industry loan volume fell 4% YoY, and rates remained elevated at 7.2%. As homeowners looked for other ways to access their equity, HELOCs more than doubled compared to their historical average. Maxwell data also found that many average income earners were edged out of the market as median home buyer income rose to $8,000 per month, or $96,000 per year. Want to gain exclusive lending data, including a deep dive into the home buyers driving market activity? Click here to download Maxwell’s Q2 2024 Mortgage Lending Report and gather takeaways from Q2’s performance that will help you optimize your mortgage volume in the second half of 2024.

Today, Rocket Pro TPO is launching something special for its broker partners at 10:30am ET. Register to learn all about it during a breaking news announcement with EVP, Mike Fawaz. Later today, you can also Register to join Fawaz for a Q&A regarding this special announcement at 2pm ET. As a reminder, Rocket Pro TPO recently announced an extension of their Home Equity Promotion: Rocket will be covering the $795 origination fee through September 30. Remember, this is a limited time offer, if you’re interested in these savings and more, contact Rocket Pro TPO today.

LoanStream wants you to RULE YOUR PIPELINE! Close More and Close Faster with The Lounge TPO submission portal, open 24/7. Outpace the competition with live portal support during submission and amplify your sales teams with program and portal training! The Lounge has unrivaled technology to upload, register, price/lock, submit and disclose in minutes! Run and download AUS results (DU/LP or both) to determine client eligibility. Plus, unlock new scenarios with a variety of loan programs from LoanStream Mortgage including Non-QM and 100% CLTV DPA programs exclusive to Approved Brokers! LoanStream delivers unlimited possibilities for programs, unparallel service, competitive pricing, and innovative technology. We’ve got you covered! Ready to elevate your business? Get Approved: Get Approved LoanStream Wholesale - Wholesale Mortgage Lending!

Commercial Lending is experiencing hyper growth due to $1.5 trillion in ballooning loans over the next 3-5 years. There is a shortage of commercial mortgage brokers, and with banks liquidity issues, a perfect storm is brewing for the secondary market that will create massive deal flow. Chris Perez, Envestion Commercial Lending, a 25-year veteran, is offering a broker partnership, turnkey with training, custom web site, tools, and marketing / leads. He is looking for 5-10 brokers per state where they are given the marketing and leads, take the application, and then turn the commercial loan over for processing, underwriting, and closing, all while continuing to do your normal residential business. Schedule an appointment today to see if you qualify or join the free weekly seminar every Wednesday 1PM EST. Adding commercial to your book of business is a way to expand your current product line while substantially increasing revenue.

You’re invited to Mortgage Machine’s ™ exclusive webinar featuring Jeff Bode, a leading expert in digital mortgages and the founder of Mortgage Machine. Joined by Dan McGrew, together they’ll showcase the latest advancements in Mortgage Machine’s technology. With robust document management and point-of-sale features, loan officers using Mortgage Machine maintain control over the entire loan lifecycle, driving efficiency, reducing costs, and enhancing the borrower experience. The system provides comprehensive support from lending and underwriting to documentation and closing in residential mortgage loans. In this webinar, you'll see how Mortgage Machine™, an all-in-one LOS, delivers a fully digital workflow experience. Discover the newest innovations in SMART documents, eClosing, eNotes, and the advantages of a completely digital mortgage workflow. Don’t miss this must-attend webinar on Wednesday, August 28 at 12 pm CT. Click here to register and stay ahead of the curve in digital mortgage solutions.

Fee collection is a pain in the neck. Not only do you need to figure out how to get upfront fees from borrowers for applications, but you also have to figure out how to get all sorts of random fees like modification fees, assumption fees, and even fees from your TPO partners. Book a demo and see how Fee Chaser handles it all. 

In a perfect world, your lending team wouldn’t overlook an error or omission, especially the kind that could land you in regulatory hot water. But, in reality, we’re only human and our minds can wander or maybe a newer employee overlooks something your more seasoned employees would have caught. That’s never going to happen with AIVA Regulatory Assist, part of the AIVA suite of virtual assistants from Dark Matter Technologies. AIVA Regulatory Assist is a centralized rules engine that helps mortgage lenders create real-time tasks and loan conditions within their LOS to perform a broad scope of state and federal loan-level compliance validation, thus simplifying loan processing, underwriting and post-close workflows. Plus, AIVA Regulatory Assist is always on the job, giving every loan her complete attention as it changes throughout the process and keeping you better informed. Learn more about AIVA virtual assistants and Regulatory Assist today.

The dinero is still out there

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Although the initial public offering (IPO) market is quiet, there are doubloons coming into residential lending. HomeLight is announcing $20 million of new funding supporting the expansion of its flagship financial product, Buy Before You Sell, to lenders across 40 new states. The Series D extension was led by Zeev Ventures, with participation from Stereo Capital and Menlo Ventures, among others. Forty lenders are currently using the product. “To date, HomeLight has partnered with over 10,000 LOs, over 28,000 real estate agents, and unlocked over $655 million in equity from clients’ existing homes across the country with Buy Before You Sell. Top agents are now able to invite their preferred lenders to the platform to seamlessly help clients sell their current home to afford their next one… Buy Before You Sell uses AI technology to allow these individuals to unlock up to 70% of the equity from their existing home and begin making offers the same day.”

FHA, USDA, and Government-related program changes

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The Single-Family Housing Guaranteed Loan Program (SFHGLP) published a Proposed Rule on January 30, 2023, proposing changes to the use of special servicing options for non-performing loans and adjusting the Mortgage Recovery Advance (MRA) process. The Final Rule was published in the Federal Register on August 15, 2024, with an effective date of February 11, 2025. To implement this rule, revisions are being made to Chapters 17, 18, and 19 of HB-1-3555, SFH Guaranteed Loan Program Technical Handbook. These changes are expected to become effective on February 11, 2025. Advanced copies of these chapters will be made available in the coming days and will be located on the LINC Training and Resource Library.

The Federal Housing Administration (FHA) posted a draft Mortgagee Letter (ML), Modernization of Engagement with Borrowers in Default, on its Single Family Housing Drafting Table (Drafting Table) for review and feedback. The draft ML proposes policy that would align with the provisions outlined in the final rule, Modernization of Engagement with Mortgagors in Default published in the Federal Register [FR-6353-F-02] on August 2, 2024. Interested stakeholders are encouraged to review the draft ML and provide feedback through September 13, 2024. Instructions for viewing the draft ML and providing feedback are available on the FHA Single Family Drafting Table. FHA will carefully consider all feedback received before publishing a final ML.

Ginnie Mae's mortgage-backed securities (MBS) portfolio outstanding grew to $2.62 trillion in July. View the Press Release.

On July 9, 2024, FHA published Mortgagee Letter (ML) 2024-13, Revisions to the 203(k) Rehabilitation Mortgage Insurance Program including updates to the 203(k) Consultant Requirements and Fees. This ML implements updates to the Section 203(k) program guidelines and is intended to reduce barriers to using the program. To support the implementation of the updates announced in ML 2024-13, FHA will make system updates for forward mortgages in FHA Connection (FHAC). These system updates will be available in conjunction with the implementation of the ML 2024-13 for all FHA case numbers assigned on or after November 4, 2024. The FHAC Guide has been updated to reflect these changes and is available on the portal homepage. For submissions through FHAC Business-to-Government (B2G), the data must be submitted for FHA case numbers assigned on or after November 4, 2024. The FHAC B2G submission requirements accommodate the new data fields. Refer to the B2G Interface webpage for technical requirements.

USDA Rural Development posted Advance Notice: Revisions to HB-1-3555, Chapters 17, 18, and 19. The Single Family Housing Guaranteed Loan Program (SFHGLP) announced upcoming revisions to technical Handbook 1-3555, Chapter 17, Regular Servicing – Performing Loans; Chapter 18, Servicing Non-Performing Loans – Accounts with Repayment Problems; and Chapter 19, Loss Claims – Collecting on the Guarantee. These changes are expected to be implemented on February 11, 2025 in conjunction with the effective date of the Special Servicing Options Final Rule.

Borrowers looking to lower their monthly principal and interest payments on their current FHA-insured mortgage, the FHA Streamline Refinance program from Plaza Home Mortgage® offers a fantastic opportunity for them to achieve just that with a fixed-rate, no cash-out option designed for simplicity and savings. Key highlights of FHA Streamline Refinance are: No appraisal required, no income or employment verification, Simplified credit qualification, and Primary or non-owner occupied.

Pennymac will update Government LLPAs effective for all Best Efforts Commitments taken on or after Monday, August 19, 2024 per Announcement 24-81.

Capital markets: rates treading water

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With great power comes great responsibility. Last week, focus was on Fed Chair Powell’s speech from Jackson Hole where he confirmed that “the time has come for policy to adjust… the timing and pace of rate cuts will depend on incoming data, the evolving outlook, and the balance of risks.” These remarks came a couple days after the minutes of the Federal Open Market Committee meeting from July were released and indicated that several committee members were ready to begin the transition to less restrictive monetary policy in September.

Now that the Fed has confidence that inflation is on a sustainable path back to 2 percent, the focus has turned to the labor market, which has softened considerably. Last week, the BLS released downward payroll revisions totaling 818k over the 12 months ending in March 2024. This revision is significantly higher than average and likely indicates the last four months of payroll growth will be less than previously reported. When combined with increasing jobless claims over the summer, the Fed may have less time to achieve the “soft landing” than previously thought.

As the case for rate cuts has become more compelling, mortgage rates over the past couple of months have eased from around 7.2 percent to the mid 6s. While the decline is welcome, it has not been enough to ignite a meaningful rise in mortgage applications. Existing home sales were slightly higher in July, but the annual pace of sales remains near the levels seen following the 2008 recession. Limited supply has kept existing home prices high although increased supply over the summer may begin to put downward pressure on prices in some markets.

This week’s month-end week, which is ahead of the long Labor Day weekend (though there is no early close Friday), is packed with supply as well as some key data. Treasury will auction $183 billion in 2-, 5- and 7-year notes over Tuesday to Thursday along with $28 billion reopened 2-year FRNs. Key data includes the second look at Q2 GDP, Fed favorite PCE, as well as updates on durable goods, consumer confidence, Fed surveys, Chicago PMI, and Michigan sentiment.

Today’s calendar kicked off with durable goods orders for July (+9.9 percent, ex-transportation -.2 percent). Orders were expected to increase 8.2 percent month-over-month after declining 6.7 percent previously. Later today brings Dallas Fed Texas manufacturing for July before Treasury auctions some short-duration bills. We begin the week with Agency MBS prices little changed from Friday’s close, the 10-year yielding 3.81 after closing last week at 3.81 percent, and the 2-year at 3.90.

Last night I was sitting on the sofa watching TV when I heard my wife's voice from the kitchen.

"What would you like for dinner my Love? Chicken, beef, or fish?"

I said, "Thank you, I'll have chicken."

She replied "You're having soup. I was talking to the cat."

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. The current blog is titled, “Hiring: Do You Remember How to Do That?” The Commentary’s podcast is live and at any place you obtain your podcasts (like Apple or Spotify).

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