9.4.24 The CFPB is Watching; Realtor Jason Walter and Originator Jim Black on Building Your Business; Rates Down Means House Prices Up

Thank you to today's podcast sponsor, Stavvy. Stavvy offers a flexible and fully customizable Loss Mitigation solution. Servicers can easily adapt to regulatory updates and market conditions, providing a seamless, customer-centric digital experience. Stavvy transforms a potentially stressful time for customers into a streamlined, secure process.

Transcript

I don’t know what, exactly, separates irony, satire, or paradox. Whatever category this falls into, it’s a classic tale of biblical proportions. (Other disaster news below.) While we’re on seafaring vessels, some parties you remember, others not, but I’m sure that I’ve never been to a yacht party. But then again, I don’t work with title companies in the Washington DC area. Thank you to Ken S. who passed along this story about how four title companies doing business in D.C. will be paying $3.29 in penalties for operating an illegal kickback scheme. Of course, state and local governments (in this case, the District of Columbia) aren’t the only ones tuned in to kickbacks. The Consumer Finance Protection Bureau is also out there, watching: Recall its kickback fine announcement regarding Freedom Mortgage a year ago. (Today’s podcast is found here and this week’s is sponsored by Stavvy. Moving real estate beyond paper documents. Stavvy is the digital platform that helps real estate professionals grow their business and ditch the paper process. Book a demo today! Hear an interview with #1 YouTube realtor Jason Walter and originator Jim Black on building your business through authentic social media.)

Business opportunity

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“Are you looking to earn extra income? Do you have clients that need to refinance or purchase an office building, car wash, or strip center? Get paid a commission just for the referral!

CommLoan's focus is to provide a superior lending experience by combining state-of-the-art technology with a concierge service. The borrower will have unprecedented access to the capital markets with their own loan underwriter. CommLoan is the first true commercial real estate lending marketplace, putting the borrower in the driver's seat by allowing them to work with our underwriters to find the loan that best suits their needs. All you do is make the referral -sit back and let CommLoan do the rest, and then be paid a commission once the loan is closed. With our innovative platform CUPIDTM (Commercial Underwriting Pricing Index Data), CommLoan has streamlined the process of obtaining commercial real estate financing. If you would like to be a part of this innovative, fast-paced company, we are looking for commissioned marketing directors as a supplement to your current mortgage job. Contact Debbie Bloyd, Business Development (469-768-0337).”

Lender and broker software, services, and loan programs

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Tappable equity (i.e., the amount a homeowner can borrow against while keeping a 20% equity stake) has grown by 100% since late 2019*. Many homeowners are “locked in” to their homes due to high interest rates and they need extra money to cover living expenses. The time for lenders to prepare is now. While the valuation process can be one of the most time-consuming and costly parts of home equity loan origination, ICE’s automated valuation models (AVMs) and digital valuation solutions can help change that and increase your success and profits. Download the new eBook, How to grow a successful home equity lending business, today to learn how ICE’s solutions can help you quickly gain an advantage in today’s home equity lending market. *Source: ICE Mortgage Monitor

“Scale your growth with mortgage-specific reporting and insights from Maxwell Business Intelligence. In our competitive and data-driven industry, timely and accurate information is crucial. Maxwell’s comprehensive business intelligence and data reporting solution, Maxwell Business Intelligence, is designed to address the unique challenges faced by lenders, enabling you to streamline operations, enhance decision-making, and boost profitability, especially in a high-interest rate environment. Toss out your expensive data analytics tools that lack mortgage-specific stats and unlock new growth opportunities with actionable, data-driven insights. Schedule a demo of Maxwell Business Intelligence today.”

“Ready to revolutionize your servicing strategy? At NotaryCam, we're leading the charge in remote online notarization (RON), transforming how servicers handle loan modifications, partial claims and assumptions. With RON integrated into your servicing workflows, experience cycle times reduced by up to 67%, slashing costs and enhancing the borrower experience. Join Brian Webster, President of NotaryCam, and Suzanne Singer, Director of Sales and Marketing, at the Five Star Conference and Expo. Discover how our solutions can streamline your processes, transform your loss mitigation, and enhance your operational efficiency. Don't miss out: Catch us at one of the sessions or schedule a one-on-one meeting to see how we can transform your mortgage servicing.”

The LOS game has changed and it’s time for you to take the lead! The top players in mortgage lending aren’t waiting for the market to shift, they’re making bold moves now to secure their future success. Take Highland Mortgage. It didn’t just switch software; it transformed the operation to close loans faster and with greater accuracy. Now Highland is outpacing and outperforming the competition. Read how Highland did it. And when you’re ready to elevate your business to the next level, choose the LOS that’s setting the new standard: MeridianLink.

“Big News at American Financial Resources, LLC (AFR): Leadership Updates to Elevate Your Experience! We’re shaking things up at AFR to bring you even better service! Bobbi MacPherson is joining us as Head of Operations, she'll be bringing a fresh perspective and deep expertise in credit policy, operations management, and cutting-edge technology. We’re also thrilled to welcome back Shaun Hamman as SVP of Strategic Accounts, ready to drive growth with our key clients. And guess what? Kayla Lopez, who’s been rocking it as VP of Strategic Planning, is now our new Head of People! With this powerhouse team, we’re taking things to the next level: for us and for you, our clients. These exciting changes reflect our commitment to innovation and delivering top-notch experiences. Let’s connect! Reach out at sales@afrwholesale.com, call 1-800-375-6071, or visit www.afrwholesale.com. We can’t wait to hear from you! (NMLS 2826)”

Compass Mortgage Finds a Better Way to Save 60-80% on Verifications. “In our first year with Truv we saved 60-80% on verifications. Cost savings are both obvious and significant from day one.” (Justin Venhousen) See Truv in action.

Regardless of cause, disasters and catastrophes continue

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Yes, Allstate just received approval for jacking up California homeowner’s rates by 34 percent… but at least the company is still operating there. As homeowner’s insurance continues to be a huge burden for any owner, disasters continue throughout the year and throughout the nation. (A recent STRATMOR blog is titled “Catastrophe and Climate Risk is Only Increasing.”) Of course, FEMA’s Disaster Declarations set the stage for servicers, lenders, and investors to change policies and procedures for loans in process or for existing borrowers in those areas.

Earlier this year, waters in the tropical portion of the Atlantic Ocean, around the Caribbean, were hotter than they have been for any other late May on record. The area is averaging around 84.7 degrees Fahrenheit, a temperature the waters usually don't hit until August and September after a summer of warming up. This is bad for a lot of reasons, including the future of coral reefs, which are already experiencing a fourth global bleaching event this year, according to NOAA. The previous record-breaking May for sea temperatures in the area was in 2005, a notorious year that brought one of the most destructive and active hurricane seasons ever for the U.S.

Warmer temperatures on land impact flora and fauna. Try living in a home without air conditioning, or with air conditioning when the power goes out. The USDA recently released a plant hardiness zone map as much of the country has, on average, gotten warmer. The new 30-year minimum temperature average was 2.7 degrees Fahrenheit warmer than the previous average. The map classifies the U.S. into zones based on an area’s average annual minimum temperature and is most useful for knowing which perennial outdoor plants will possibly not die in your area if you keep them outside. You can and will still kill your plants even if you plant according to the map, since it does not factor in how wet, dry, or volatile your area’s climate is. It also won’t tell you if your plants can actually survive the extreme heat of summer.

Where are the latest FEMA declared disasters? Florida: DR-4806-FL. Iowa: DR-4796-IA. And New Mexico: DR-4795-NM.

On 8/28/2024, with Amendment No. 2 to DR-4806, FEMA declared federal disaster aid with individual assistance to Florida counties Alachua and Jefferson affected by Hurricane Debby from 8/1/2024 and continuing. See AmeriHome Disaster Announcement 20240812-CL for inspection requirements.

On 8/30/2024, with Amendment No. 3 to DR-4806, FEMA provided an Incident Period End Date of 8/27/2024, for Florida counties affected by Hurricane Debby from 8/1/2024 to 8/27/2024. View the AmeriHome Disaster Announcement 20240816-CL for inspection requirements.

On 8/28/2024, with Amendment No. 9 to DR-4796, FEMA declared federal disaster aid with individual assistance to Scott County Iowa affected by severe storms, flooding, straight-line winds, and tornadoes from 6/16/2024, to 7/23/2024. See AmeriHome Disaster Announcement 20240813-CL for inspection requirements.

On 8/26/2024, with Amendment No. 6 to DR-4795, FEMA provided an Incident Period End Date of 8/20/2024, for New Mexico counties affected by the South Fork Fire, Salt Fire, and flooding from 6/17/2024 to 8/20/2024. See AmeriHome Disaster Announcement 20240810-CL for inspection requirements.

Capital markets: lower rates just jack up house prices, right?

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Both economic growth concerns and monetary policy uncertainties have significantly impacted riskier assets of late and were the main headlines that traders focused on to open this abbreviated trading week. With income growth showing signs of slowing, there is a potential risk that consumer spending could decelerate, which would likely affect mortgage originations and demand. It's a bit odd, because economic data from last week strengthened the case for a potential "soft landing" in the U.S. economy: Revised GDP growth for Q2 was higher than expected at 3.0 percent, largely due to strong personal consumption.

The current high-interest-rate environment continues to weigh on construction spending, with both residential and nonresidential sectors experiencing declines. This trend is concerning for the mortgage industry, as reduced spending on residential construction could signal a slowdown in new home builds and, consequently, a decline in mortgage originations. Nonresidential spending is also down, with tight credit conditions exacerbating the situation, making it more challenging for mortgage lenders to expand their commercial lending portfolios.

As we enter the final third of the year, agency mortgage bonds are performing well, despite typically low August returns. With the Treasury curve nearing an upward slope again and volatility remaining within manageable levels, mortgage bond performance has been strong. However, the possibility of the Fed easing monetary policy could lead to faster prepayment speeds and duration contractions for higher-tier coupons, while lower coupons may face selling pressure.

The question has come up, “Won’t lower rates create more demand for housing as it becomes more affordable, increasing the pool of bidders for properties, and increasing values?” Uh, yup.

Today’s economic calendar kicked off with mortgage applications increasing 1.6 percent from one week earlier, according to data from the Mortgage Bankers Association. We’ve also received international trade for July where the deficit was expected to widen to $79.0 billion from $73.1 billion (although it has no impact on rates). Later today brings July factory orders, the Job Openings and Labor Turnover Survey for July, a Treasury buyback in 2-year and 3-year coupons, and the Federal Reserve will release its Beige Book in preparation for the FOMC’s September 17-18 meeting. It’s already Wednesday, and we begin it with Agency MBS prices nearly unchanged from Tuesday’s close and the 10-year yielding 3.83 after closing yesterday at 3.84 percent.

THINGS YOU NEED TO KNOW IF YOU MOVE TO THE SOUTH. (Part 2 of 4; thank you to Guy K.)

8. People actually grow, eat, and like okra.

9. Fixinto is one word. It means I'm going to do something.

10. There is no such thing as lunch. There is only dinner and then there's supper.

11. Iced tea is appropriate for all meals, and you start drinking it when you're two. We do like a little tea with our sugar. It is referred to as the Wine of the South.

12. Backwards and forwards means I know everything about you.

13. The word jeet is actually a question meaning, “Did you eat?”

14. You don't have to wear a watch, because it doesn't matter what time it is, you work until you're done or it's too dark to see.

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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(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. The views and opinions in this newsletter are mine alone unless otherwise specifically stated herein.)