8.27.24 Middle East Impact on Bonds; Curinos' Rich Martin on Home Lending Data; Advanced Indicators

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

Why can’t lending be simple… like “The Revolutionary Haircutting System You've Come to Love!” They even have the forethought to take the summer off. Vendors’ and lenders’ senior management, realizing that it’s very difficult to pivot on a day-to-day basis, is putting forethought into their businesses. Planning is good. But who does your CEO go to for advice? How does communication occur? Some companies have someone assigned to “change management” versus having each department head handle it. Join Kristin Messerli and Robbie Chrisman today at 10am PT/1pm ET for the latest episode of Mortgages with Millennials as they chat with industry expert Michael Pearson of A&D Mortgage about technological innovations aimed toward the next generation of homeowners. Topics will include product expansion, tech innovations, communication methods, and how companies are bringing along the next generation of employees. (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 Curinos’ Rich Martin on the company’s home lending market data, which now officially includes home equity loans and lines of credit in addition to first mortgages.)

Lender and broker software, services, and loan programs

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“2024 has been the year of artificial intelligence: You can’t go more than 10 minutes without someone mentioning AI in a conversation. At Optimal Blue, we embrace AI, but not just to check a box. We implement AI with a purpose: to help our customers improve efficiency and maximize profitability on every loan transaction. One example is the AI-powered Profitability Assistant in our CompassEdge hedging and loan trading platform. It uses generative AI to provide an unbiased and factual analysis of the day-over-day changes to your P&L, producing a quick summary and a list of the top factors influencing profitability and highlighting the impact in both dollars and basis points. This AI assistant eliminates a process that could take a senior secondary marketing professional hours to research and evaluate. To learn more about how Optimal Blue is putting AI to work to maximize your profitability, reach out to us here.”

“When rates drop, loan officers using LoanMAPS can connect with clients, complete the application, lock rates, and underwrite loans in just minutes. How do they do it? Our convergent platform, LoanMAPS, powered by Augie AI, combines high-tech solutions with your mortgage expertise, delivering a unified platform and master database to ensure you never miss a beat when opportunity knocks. LoanMAPS automates your workflow, from AI-driven client identification to real-time data updates and upfront underwriting at application. LoanMAPS scales with your business, enhancing efficiency, accuracy, and market share. Are you tired of juggling multiple systems and struggling with inaccurate data? LoanMAPS simplifies your processes with a single, convergent platform that lowers costs and streamlines operations. Loan officers who have switched rave about its efficiency and ease. Experience the future of lending: Visit our website or schedule a demo today! Secure a 3-month free subscription to TheRuleTool as a thank you!”

“Looking for Non-QM and DSCR liquidity? MAXEX offers the most efficient way to expand your business with qualified borrowers underserved by traditional loans. Our full suite of alt doc, full doc and DSCR programs helps you more efficiently compete for real estate owners, high net worth individuals, business owners and other emerging expanded credit segments. With a single contract, you gain access to a growing network of over 25 leading buyers, standardized guidelines, and a single fulfillment process. Get premium Non-QM and DSCR liquidity without the premium overhead. Visit MAXEX to learn more.”

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.

“At ICE, our ultimate mission is to deliver an integrated, end-to-end mortgage ecosystem that supports the entire real estate and housing finance life cycle… And we’re working to actively build a more efficient future. Innovative mortgage software that lowers costs and improves productivity isn’t born in a vacuum. That’s why the servicing product and engineering teams at ICE are unified at every stage of design to bring powerful capabilities to market. It’s a collaborative approach that eliminates silos and taps into diverse perspectives to deliver solutions that meet lenders’ and servicers’ evolving needs. Read ICE’s new blog to get an inside look at their design philosophy and see how when development teams collaborate, everyone wins.”

Wholesaler news

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Broker’s First Funding, your BFF in Wholesale, is proud to introduce Tiffany Nguyen, EVP of Sales. With over 35 years of mortgage experience, starting as a Processor and transitioning to Sales as an Account Executive in 1998, her passion for our industry shines through in everything she does. Shabi Asghar, President of BFF, happily explained, “Tiffany has been a top AE at every company she’s ever worked for, and we’re very fortunate to have her on the BFF team.” Are you a Broker looking to engage with the best in the business and experience unparalleled service levels? Contact Tiffany today. BFF offers a broad spectrum of products, from Agency to a full array of non-QM products. Contact us to learn more, and be sure to follow us on LinkedIn, Instagram, and Facebook.

“We're thrilled to introduce enhancements to Carrington’s Investor Advantage (DSCR) program, providing our broker partners with even more options for their borrowers. Effective immediately, we're offering new 4- and 5-year prepayment penalty options. Plus, we've added a no-ratio option to our DSCR program, ideal for seasoned investors looking for financing solutions. These updates are part of Carrington’s Non-QM Advantage line of programs, designed to deliver unmatched flexibility and value. This is also the last week of our summer special! All Non-QM loans over $1 million will have the underwriting fee waived, so be sure to submit your loan by the end of August to take advantage of this offer. For more information about these changes and our special offer, please contact your Carrington Account Executive or go to https://carringtonwholesale.com/ or https://carringtoncorrespondent.com/ .

In-person events, training, and webinars continue

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A good place for longer term conference planning is to start is here for in-person events in the future.

Join Kristin Messerli and Robbie Chrisman today at 10am PT/1pm ET for the latest episode of Mortgages with Millennials as they chat with industry expert Michael Pearson of A&D Mortgage about technological innovations.

Tuesdays at 11am PT, two veteran LOs discuss all things mortgage with Industry Leaders: Mortgage Pros 411 with Audrey Boissonou and Kevin Casey. Today features Joe Weber with the Oakley Insurance Agency to discuss all things insurance.

Looking for more in-depth commentary on weekly mortgage news? Register here for Wednesday’s 11AM PT "Mortgage Matters: The Weekly Roundup” presented by Lenders One. This week’s guest is Sue Melnick, CHLA and Bay Equity Home Loans!

In Honolulu, join MBAH for an informative event at BoxJelly | Hawaii's Original Coworking Space, Wednesday, August 28 · 5 - 7:30pm HST, and hear discussions how the NAR settlement will affect real estate strategies, lending practices and buyer behavior. Guest Presenter: Patrick O'Neill, Hawaii Association of Realtors, Standard Forms Committee Chair.

Thursday, August 29th, will be another episode of The Big Picture at 3PM ET… Rich Swerbinsky hosts a variety of guests, and Thursday will be joined by the CFPB’s Assistant Director, Mortgage Markets, Mark McArdle. Mark will take questions from the live audience and provide insight on what the Bureau is working on with the Presidential election fast approaching. You can click here to register for Thursday’s 3 PM ET show.

Friday the 30th end the week and the month with The Mortgage Collaborative’s Rundown with Melissa Langdale covering current events in the mortgage market for 30 minutes starting at noon PT, 3PM ET. This week’s guest is John Hardesty from Argyle!

After Labor Day…

National MI offers its upcoming September 2024 webinar sessions. As does MGIC, Essent, Arch, Radian, and Enact.

Join NAMB for an exclusive webinar on AI, where industry expert Ginger Bell will explore how AI is transforming the mortgage industry. Discover cutting-edge strategies to enhance your business on September 4th. Don’t miss this opportunity to stay ahead of the curve! Register here.  

September 4-6 the NY MBA is taking over the Turning Stone Resort Casino in Verona, NY with a slate of top-notch speakers and information.

In the inaugural edition of IMN’s HEI & Home Equity Capital Markets Forum, September 5-6 at the Marriott Downtown in Austin, TX. The initial response has been overwhelmingly encouraging and we are anticipating 400-500 attendees, including all of the notable Issuers, Originators, Investors, and Servicers in the space.

The Federal Housing Finance Agency (FHFA) announced the first meeting of the Advisory Committee on Affordable, Equitable, and Sustainable Housing (ACAESH). The ACAESH meeting will be in person September 10-11 at FHFA’s headquarters in Washington, D.C., with video and audio coverage available. Members of the public interested in watching the ACAESH meeting can attend in person or virtually. The meeting agenda and registration information will be available at https://www.fhfa.gov/programs/acaesh. In-person attendance will be limited. Full details on the meeting can be found in the Federal Register notice.

Advanced Underwriting the Self-Employed Borrower ​​with Marianne Collins: September 10th at 1pm ET.

Join Optimal Blue, Tuesday, September 10, 12 p.m. CT for the next session in its Hedging webinar series, Hedging 301, as they take a deeper dive into more advanced capital market strategies and how to effectively manage your mortgage pipeline.

A&D Mortgage is looking forward to attending the Great Northwest Mortgage Expo in Seattle on September 11, Washington's largest gathering of mortgage professionals. Come meet with members of the A&D Team to learn about the exciting loan and tech solutions. Use ADFREE promo code to get complimentary access to the exhibit hall, breakout sessions, and networking events.

Register for the New England Mortgage Bankers two-day conference, September 11-13 in Portsmouth NH. Hear from a range of speakers, learn about new technologies and products, join golf and social events.

9/12-9/13, the Mississippi MBA’s Fall Conference will be held at the Sheraton Refuge in Flowood, MS. “Our theme, Elevate Your Impact, reflects our commitment to empowering mortgage bankers with the latest insights, strategies, and tools to make a significant impact in our industry.”

There’s the Zelman & Associates 2024 Housing Summit, Thursday, September 12th & Friday, September 13th in Boston, MA. The cost to register is $1,595.

Have you heard about (read: registered for) some of our expanded media offerings? Chrisman Commentary is pleased to bring you a variety of video shows hosted on Zoom throughout the week. Take your pick: We have a show focused on technology and innovation (Now Next Later Mondays at 1pm ET, presented by BILT Rewards), origination (Mortgage Pros Tuesdays at 2pm ET), big-name interviews (Mortgage Matters Wednesdays at 2pm ET, presented by Lenders One), headline news (The Big Picture Thursday’s at 3pm ET), opinion (Last Word Fridays at 1pm ET), advisory services (Advisory Angle first Tuesday of the month at 2pm ET, presented by STRATMOR Group), capital markets (Capital Markets Wrap second Tuesday of the month at 3pm ET, presented by Polly), regulation and compliance (Regulation Central third Tuesday of the month at 3pm ET), and reaching the next generation of homeowners (Mortgages with Millennials last Tuesday of the month at 1pm ET, presented by The Mortgage Collaborative). (If you don’t see a presenting sponsor, please reach out to Chrisman LLC’s Anjelica Nixt to inquire about opportunities.)

Capital markets: rates quiet despite the news

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With plenty of data (housing prices, the second revision to Q2 GDP, Fed-favorite PCE, etc.) and $183 billion in Treasury auctions to look forward to this week, and to say nothing about the debate over the size of rate cuts, Monday was oddly quiet in the bond markets. Economic data that was released was limited to a larger than expected jump in Durable Orders in July (expected 4.0 percent, actual 9.9 percent, previous -6.9 percent) fueled by a jump in transportation equipment orders. Business spending was soft during the month, evidenced by a 0.1 percent decline in new orders for nondefense capital goods excluding aircraft. Manufacturers are largely standing idle until looser policy comes to fruition and supports broad-based capital expenditures.

Much of the market movement to open the week was driven by geopolitical tensions. Israel over the weekend attacked Hezbollah targets in Lebanon in a preemptive attack designed to thwart a major missile offensive. Hezbollah retaliated by raining some 320 missiles on northern Israel, most of which were intercepted. Both that conflict and the Ukraine war (Ukraine invaded Russia earlier this month and now controls nearly 500 square miles in the Kursk region) are expanding in a way that geopolitical analysts had feared; and in a way where markets can no longer ignore them.

The flare up in the Middle East may muddy the waters for bond traders, who are wagering on both the size of the first rate reduction and future Fed easing. The big question is not whether the Fed will cut rates next month, but by how much. Yes, the Federal Reserve is poised to cut interest rates at its September meeting, more than 2.5 years after it started hiking borrowing costs in order to crush pandemic inflation.

But now that it’s clear Fed rate cuts are coming, the question is whether the market’s predictions (pricing is averaging out to 32 basis points of cuts in September, 67 basis points by November, and 102 basis points by December) will turn out to be accurate. And for the Fed, the trick is getting inflation down to its 2 percent target without hurting the labor market. Chair Powell suggested that the magnitude of easing would be “dependent on incoming data.”

None of the early news moved rates: Advanced indicators for July kicked off today’s economic calendar, the goods trade balance (expected to deteriorate to $97.0 billion from $96.6 billion) with retail and wholesale inventories (expected to increase 0.2 percent and 0.4 percent, respectively, from 0.9 percent and 0.2 percent).

Later today brings Redbook same store sales, house price indices for June from Case-Shiller and FHFA, August consumer confidence, Richmond Fed services, Dallas Fed Texas services for August, and several Treasury auctions that will be headlined by $69 billion 2-year notes. After the first salvo of news, Agency MBS prices are little changed from Monday’s close, the 10-year is yielding 3.85 after closing yesterday at 3.82 percent, and the 2-year is at 3.95.

Five guys are stranded on an island.
One guy gets the daily firewood, one guy bakes the daily bread, one guy climbs to the top of the mountain to get fresh water, one guy fishes all day to bring home dinner, and one guy does nothing but consume the firewood, the bread, the water, and the fish.
One day the workers ask the fifth guy why he doesn't get the items himself, and he replies, "Without me, none of you would be employed."

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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