9.9.24 Election Impacts; Polly's Marcus Lam on Mortgage Concerns; Early Payoff Warning

To stay competitive in this market, lenders need to find efficiencies and understand their operations in a much deeper way. Richey May’s consulting, cybersecurity, business intelligence, and automation services are designed by mortgage experts to help you continue to drive growth and increase profitability. Visit https://richeymay.com to learn more about how you can protect your business or set up a meeting with one of Richey May’s experts.

Transcript

Forget ATR. What about ATN? The Ability to Nap. Here in Denver, at The Mortgage Collaborative event, napping is not on the agenda… Every lender out there is trying to improve their business, and many businesses can improved with creative methods. (Don’t try this with the kids!) Housing and politics are being discussed in the hallways here, and here’s a good article on how Kamala Harris’ plan compares to Donald Trump’s. We still have nearly two months until the election, although the first debate, not to be missed, is this Tuesday night. Former President Trump recently said he would ban undocumented immigrants from obtaining home mortgages, and vowed to “create a government efficiency commission tasked with conducting a complete financial and performance audit of the entire federal government,” he said during a speech at the Economic Club of New York. Elon Musk has agreed to head that task force, saying, “I think it would be great to just have a government efficiency commission that ensures that the taxpayer money is spent in a good way. (Analysts are quick to point out that Tesla and SpaceX have received billions in taxpayer funds.) (Today’s podcast is found here and Sponsored by Richey May. Richey May’s consulting, cybersecurity, business intelligence, and automation services are designed by mortgage experts to help you continue to drive growth and increase profitability. Hear an interview with Polly’s Marcus Lam on what capital markets folks are paying attention to as we move into the final third of 2024.)

Employment & business opportunity

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“Best Summer in ACC Mortgage’s 25-year history! We are innovating for the next 25 years and always looking for talent. Do you want to work with the leader in the Non-QM space and have stability? ACC is selectively looking to add three (3) new AEs to our sales team as well as seasoned underwriters. We are growing in a controlled fashion. This article talks about ACC’s approach and philosophy to help make Non-QM easier for not just the brokers but the team at ACC Mortgage: Big Deal - June - ACC Mortgage. Send your resume to Robert for a confidential interview.”

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.

Lender and broker software, services, and loan programs

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Do you need a warehouse line? First Horizon Mortgage Warehouse Lending is open for business! For over 40 years, First Horizon has been a reliable partner, continuously offering committed warehouse lines and a suite of product offerings to qualified borrowers. We keep things simple and efficient so you can be successful. To learn more please contact Co-Director Scott Walker at (901) 517-0320.

Since 2015, Lender Toolkit has been the leader in mortgage automation. Whether it is optimizing your LOS, AI Underwriting, or improving your post-close process, Lender Toolkit has been at the forefront of mortgage automation technology. $140 billion in Customer Volume, and Over 400 lender customers chose Lender Toolkit. Don’t settle for less; schedule a demo with Lender Toolkit today!

Refinance activity is heating up! The MBA has reported refinance activity is at its highest level since March 2022, fueled by anticipated interest rate declines. Are you prepared? Do you know where your refinance opportunities are? Get ready with MMI’s new Refinder tool. Set a target refi rate and Refinder scans your portfolio of past loans to pinpoint refinance opportunities among past borrowers, offering insights like potential monthly savings, cash-out options, and current LTV. With a smart ranking system, Refinder helps you prioritize leads, making it easier to start meaningful conversations with clients about refinancing. As rates trend downward, now is the time to unlock hidden value in your database. Don’t miss out: Schedule a demo of Refinder now.

Hit the jackpot at VIBE 2024 on Friday, October 18th at the Pearl Theater in Palms Casino & Resort in Las Vegas (baby)! Join Kind Lending's VIBE (Very Important Broker Exchange) for an unforgettable experience that will supercharge your business. There’s no risk involved when you attend VIBE 2024, only reward. Why VIBE? We have an all-star lineup! From Paralympic gold medalist Blake Leeper to Navy SEAL hero Mark Owen, our speakers have conquered unimaginable challenges. Additionally, industry leaders like Barry Habib, Grant Cardone and Glenn Stearns will share their secrets to success so you never have to roll the dice on future business decisions again. Become a high roller with exclusive insights, unparalleled networking, and free admission! Connect with your Kind AE to access your FREE registration code today! Not yet working with Kind? Email us and we’ll send you a code!

With the OBMMI 30-year conforming rate currently at the lowest level since spring 2023, borrowers are eagerly awaiting a rate decline to seek refinancing. As rates drop and refis heat up, recapture borrowers with technology that helps you know who to call and what to say. Capture℠ from Optimal Blue is the lead analytics platform you need to transform current customers into business recapture. Identify loans that may be eligible for refinancing or home equity offers within your servicing portfolio, lead database, or any other borrower data set. Capture provides near-real-time, personalized pricing scenarios, so you can determine whether borrowers can reduce monthly payments or otherwise save money by refinancing to a shorter term or consolidating debt. Start maximizing profitability by optimizing refinancing opportunities within your servicing portfolio or any borrower data set. Automate your recapture strategy with Capture before you lose your borrower to competitors.

Heading into ACUMA’s Annual meeting, Dark Matter Technologies wants credit unions to learn more about its Empower LOS platform and AI-powered functionality and how these tools can usher them into a future of higher productivity and more appreciation from tech-savvy mortgage shoppers and refinancing homeowners. Empower is a high-performance, cloud-based LOS that automates repetitive processing tasks based on the lender's configurations, reducing the need for human intervention, and providing a mobile connection to keep members in touch with their loan officer and data. As far as its commitment to credit unions, this is no summer romance. Credit unions make up almost half of Dark Matter’s client roster, with three added so far in 2024. In other words, Dark Matter is serious about wooing and winning your business. Schedule a demo today to see how the Empower LOS can help boost your mortgage team’s throughput and member satisfaction scores.

LoanStream wants you to FALL into MORE Business with September Price Improvement Specials on Non-QM, Prime and Closed End Seconds. Available for a limited time. 50 BPS on all Full/Alt-Doc Non-QM Loans with FICO ≥ 700 and LTV ≤ 70%, 50 BPS on all DSCR with a minimum 3YR prepay penalty, DSCR ≥ 1.0, and FICO ≥ 660. 37.5 BPS on FHA Standard Balance and FHA Streamline, and VA IRRRL (Can be combined with Select), 25 BPS on FHA/VA/DPA for all FICO scores (Excludes CalHFA, FHA Standard Balance and Streamline, and VA IRRRLs. Can be combined with Select). 25 BPS on ALL Closed-End Seconds. Restrictions apply, talk with your AE: September 2024 Specials LoanStream Wholesale - Wholesale Mortgage Lending. Plus, take a deep dive into HELOC ONE and Closed End Seconds to expand your market with our new webinar. Register now: Webinar Registration LoanStream Wholesale - Wholesale Mortgage Lending.

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.

An internal audit is required to apply for or maintain Fannie Mae approval and an effective internal audit function will do so much more. It will help you better understand what is really going on in your operation, so you can make informed decisions and operate more effectively while minimizing your risk. There are many free resources for sellers and servicers, provided by Fannie Mae, to assist in meeting your internal audit requirements. Discover these resources here and tune into Richey May’s Internal Audit Insight video series to get answers to all your internal audit questions. From risk assessment to TRID tolerance requirements, each episode explores how internal audits can fortify your operations, enhance compliance, and streamline processes. Email info@richeymay.com to speak with one of our experts today!

Conventional conforming changes from around our biz

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Check out the latest compilation of policy changes and updates through August 2024 from Fannie Mae’s Selling Guide, Servicing Guide, Lender Letters, and Desktop Underwriter® (DU®)/Desktop Originator® (DO®) release notes.

Fannie Mae released the Condo/Co-op Status Lookup to provide condo association and co-op boards and their management companies the ability to check if Fannie Mae is aware of any condition with the project that does not meet one or more of our published Selling Guide B4-2.1, General Project Standards requirements. Homeowners’ associations (HOAs) are uniquely positioned to remedy identified conditions and are encouraged to work with their mortgage lenders once remedied so that their lender can submit documentation to Fannie Mae.

Fannie Mae released additional information regarding new protections for tenants in multifamily properties with mortgages backed by Fannie Mae and Freddie Mac. Under the policy, which is effective beginning February 28, 2025, all new GSE-backed loans will require multifamily borrowers to include the following three minimum standards within tenant leases. To provide additional transparency to tenants and to help lenders and borrowers implement the new requirements, Fannie Mae and Freddie Mac published FAQs related to the standards and an initial policy grid that outlines the policy, applicability, updates to loan documents, implementation requirements for borrowers, and monitoring and enforcement details. Tenants can use Fannie Mae’s Renters Resource Finder online look-up tool to help determine if they live in a multifamily property with a mortgage backed by Fannie Mae.

Freddie Mac published an overview of its policy framework to require minimum lease standards at multifamily properties with a new enterprise-backed loan. Announced by the FHFA in July, the lease standards require a 5-day grace period for rent payments, a 30-day notice for rent increases and a 30-day notice of a lease expiration. The policy will apply to new loans under application beginning in February of 2025. The policy framework, which was published jointly by both Freddie Mac and Fannie Mae on their respective websites, includes an overview of implementation, monitoring and enforcement provisions. The Enterprises also published identical FAQ documents. Additional details will be provided in updates to the Multifamily Seller/Servicer Guide and loan documents in early 2025.

Fannie Mae published September Selling Guide, SEL-2024-06, updated to establish loan delivery requirements for lender-formed Green MBS and a Fannie Mae Green Majors® pool, remove, add, and replace certain terms in our appraisal practices policy to mitigate subjective terminology used in appraisal reports; and automate Desktop Underwriter® (DU®) review of the supplemental asset report to extend employment validation.

Capital markets: remember those early payoff penalties

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U.S. Treasury yields fell across the board last week, and mortgages tagged along for the ride. Growth concerns, softer-than-expected July job openings, and the mixed non-farm payrolls report all suggested the potential for a slightly slowing economy, which in turn leads to lower rates. Analysts can yammer and predict whether it’ll be 25 or 50 basis points next week.

Just as importantly, if not more so, the yield curve between U.S. 10-year and U.S. 2-year briefly normalized for the second time in over two years, after un-inverting last month for the first time in 25 consecutive months. An inverted yield curve is widely seen as a recession indicator, but normalization of the curve is not necessarily a positive sign as the curve can un-invert before a recession hits.

Rate cuts are coming, but the August jobs report that was released on Friday did little to settle the debate if a 25-basis point or 50-basis point rate cut will be the move. Chatter out there is that 50 basis points may be more likely, but 25 basis points is much more sensible. Firms continued to hire in August and the economy kept expanding: The economy added 142k jobs last month, which was below the 160k consensus estimate. As usual, the previous two months were revised downward, this time by a cumulative 76k. Attention is already turning to this week's CPI report to end the debate on the degree of easing, but the Fed certainly seems intent on “spiking the punch bowl” again.

This first full week of September brings key inflation updates as well as the $199 billion mini-Refunding to be held over Tuesday to Thursday. On inflation, the CPI and PPI will be released on Wednesday and Thursday, respectively, with import prices on Friday. Other reports of note include wholesale trade, consumer credit, small business optimism, the budget statement with Michigan sentiment on Friday. No Fed speakers are currently scheduled with the Fed in its blackout period. Regarding MBS, Class A 48-hours is on Thursday after Agency prepayment releases to close last week.

Today’s economic calendar kicks off later this morning with wholesale inventories and sales for July along with the August Employment Trends Index. After that, the New York Fed will release their Survey of Consumer Expectations and July consumer credit will be released in the afternoon. We begin the first full trading week of September with Agency MBS prices slightly worse than Friday’s close, the 10-year yielding 3.75 after closing last week at 3.71 percent, and the 2-year at 3.69.

From Michigan, Don C. writes, “You know you’re old when you care more about weed killer than killer weed.”

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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