9.30.24 Disaster Fallout; Andy Duane on Basel III; Rates Down, Apps Up

Today's podcast is sponsored by Candor. Candor’s authentic Expert System AI has powered more than 2 million flawless, hands off underwrites. Every credit risk decision Candor makes is backed by a Warranty, eliminating repurchase worries.

Transcript

Well, this is the week that many have been waiting for: Fat Bear Week! The nearly 600 mortgage folks here in Las Vegas at the ACUMA event can talk about little else besides that, and needing a GPS for finding your way around town and back to one’s room. A more serious topic of discussion is increasing storm strengths over the years, most recently evidenced by Helene which is blamed for deaths in five different states. Fairway Independent is putting up $1 million dollars towards the much-needed relief efforts due to Hurricane Helene. CEO Steve Jacobson shot out a note. “That is barely enough. We are challenging all of the main IMBs and the major wholesale lenders to do the same. Why not? If we are really all here to help and serve others, why not come together when it is needed, and collectively support a region that is in desperate need? Our industry has a responsibility to help when needed. The HELP is NEEDED.” Thank you, Steve, and Fairway. (Today’s podcast is found here and this week’s is sponsored by Candor. Candor’s authentic Expert System AI has powered more than 2 million flawless, hands off underwrites. Every credit risk decision Candor makes is backed by a Warranty, eliminating repurchase worries. Hear an interview with Polunsky Beitel Green's Andy Duane on proposed changes to the Basel III capital requirements.)

Jobs and partnerships available

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A national, family owned, direct lender is looking for Loan Officers that are aspiring to grow in to being a Branch Manager. Branch Managers have internal support to empower you to be the face of your business while providing the critical support you need to thrive. Whether you’re a solo professional or have a team of your own, the company infrastructure is designed to help you hit the ground running and succeed in today’s competitive market, while having the freedom to set your you margins and maximize your earning potential. This role is ideal for Loan Officers that are wanting to take the next step in their career and become a Branch Manager. To take the next step in your career, confidentially send your resume to Chrisman LLC’s Anjelica Nixt for forwarding; specify the opportunity.

“Do you do $10M per month or more in Retail Production Volume? An aggressive national mortgage bank/ servicer is aggressively growing and seeking large production teams or small companies to set up a "Capital Partnership" to help drive your growth. Take advantage of a better margin and operating strategy to collect greater profits and scale. This is truly a ‘company within a company’ strategy, with the goal of the relationship is to leverage back-office mortgage functions (e.g., secondary, technology, compliance, operations, and licensing) to provide you with long-term production growth opportunities. If you are a strong retail loan origination team feeling limited by management, or an independent mortgage lender looking for new options for your team, we offer a compelling alternative to standard “branch” offerings. Confidential and serious. Email Chrisman LLC’s Anjelica Nixt and specify the opportunity.”

Lender and broker software, services, and loan programs

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Introducing the Blueprint for Reverse Mortgage Success! Leading reverse mortgage lender and servicer Longbridge Financial, LLC (NMLS #957935) is excited to launch its newest initiative tailored for mortgage professionals: A Blueprint for Reverse Mortgage Success. Did you know the mortgage industry left $200 million in net revenue behind in 2023 according to Home Mortgage Disclosure Act data? This comprehensive program is designed to equip you with the insights and tools to thrive in the growing reverse mortgage market, where seniors hold a wealth of untapped home equity. From expert guidance to actionable strategies, Longbridge is here to help you unlock new opportunities for your business. Come meet Longbridge CEO Chris Mayer and the Executive Team at MBA Annual to learn more! Set up a meeting with the Longbridge leadership team. Can’t make it to MBA? Contact Adrian Prieto, SVP of Wholesale & Third-Party Relationships for Longbridge to learn more.

Today’s mortgage landscape is competitive, and mortgage lenders want to avoid spending money, time and resources on prospects who might eventually switch to another lender. Similarly, potential borrowers want the flexibility to shop for mortgages without impacting their credit. TransUnion is improving the mortgage underwriting process with TruVisionTM Trended Early Access Soft Check. This soft inquiry report, which pulls industry-leading TransUnion trended credit data, enables mortgage lenders to begin underwriting earlier, reducing unnecessary, upfront verifications and processing costs while helping protect pipelines. Best of all, lenders can reassure potential borrowers they can shop around without fearing their credit scores might be negatively impacted. Now that’s what we call a win-win! Learn more here.

“Raise the Stakes for Broker Success at VIBE 2024! On October 18, join Delfino ‘Del’ Aguilar, Kind Lending’s Head of TPO Sales, with an exclusive broker panel in Las Vegas at VIBE 2024! This all-star lineup of top mortgage brokers (Ben Lemon of Direct Rate Home Loans, Eric Hines and Daniel Iskander of West Capital Lending, Thaun Nguyen of Loan Factory, and Tom Ahles of Edge Home Finance) will reveal how they’re winning big in today’s challenging market. Attendees will unlock exclusive industry insights and game-changing, proven strategies from powerhouse experts like Glenn Stearns, Grant Cardone, and Barry Habib! Did we mention VIBE 2024 is free? Secure your spot today by contacting your Kind Account Executive for your registration code. New to Kind Lending? Email us to get started! Whether you’re looking to sharpen your edge or stack the odds in your favor, this is the panel you can’t afford to miss!”

“Attending NAMB National? Meet NexBank at Booth #10 and learn about the benefits of working with a full-service depository bank. We’ve been in the business since 2008 supporting Wholesale, Non-Delegated & Delegated Correspondent Lending, and Warehouse Lending. NexBank’s loan programs include Conventional, FHA, VA, and Portfolio. Our portfolio loans (Full Doc & Non-QM) are available for amounts up to $2.5 million, with ARM and Fixed Rate options along with Interest Only. Plus, we allow cash-out to 80 percent on Primary with no max cash-back limit, where applicable by law. We offer Warehouse Lending for brokers looking to transition to correspondent lending. If you have loans underwritten to agency standards but unsaleable due to investor overlays, we have a team dedicated to purchasing investor fallout loans. Contact us. Restrictions apply. Subject to change. For mortgage professionals. Not intended for general public. Member FDIC | Equal Housing Lender | NMLS672886.”

“Meet Maxwell at ACUMA in Las Vegas. Maxwell powers all the ways you do mortgage with the only ecosystem of integrated software, services, and capital. As your partner, we’re just as dedicated to bettering the financial lives of your members and expanding homeownership opportunities for all. Credit Unions using Maxwell have even seen an 8x higher net promoter score (NPS) vs. large banks. We’d love to tell you more about how Maxwell can help you and your members. Stop by our booth #32 at ACUMA or schedule a call with our team to learn more.”

Is your LOS investment averaging a 5:1 return? To combat today’s tight margins and high operating costs, lenders are focusing on new ways to drive efficiency and profitability. ICE recently partnered with independent market research firm MarketWise Advisors, LLC to evaluate the financial impact of the Encompass® platform on its clients.Download the full summary of their comprehensive study to explore the significant ROI and cost-saving benefits the platform provides.

Disasters hit everyone personally and in the pocketbook

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I don’t care if you don’t believe in climate change, or the cause of it. The fact of the matter is, investors, servicers, insurance companies, and all related parties do, and it impacts mortgage rates (through servicing values) and insurance premiums. 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.

As noted in the opening paragraph, Fairway Independent is contributing $1 million to recovery efforts. Storms don’t care about politics. Hurricane Helene was a beast of a storm, leading to devastation far inland related to serious floods even in the mountainous regions of western North Carolina. Helene hit Florida as a Category 4 hurricane and notably remained a hurricane six hours after landfall, only then falling back into tropical storm strength. Helene was the ninth-strongest hurricane since 1900 to make landfall, and with winds of 140 miles per hour was the most powerful hurricane to hit the Big Bend of Florida since the first records were kept in 1851. Helene has continued to cause destruction with flooding not seen in decades near Asheville.

There is 20240913-CL Disaster Announcement: North Carolina Tropical Storm Helene with 25 Counties Granted “IA” by FEMA. On 9/28/2024, with DR-4827, FEMA declared federal disaster aid with individual assistance to counties affected by Tropical Storm Helene from 9/25/2024 and continuing. Federal disaster aid with individual assistance has been made available to counties in North Carolina to supplement recovery efforts in the areas affected by Tropical Storm Helene from September 25, 2024, and continuing.

On 9/28/2024, with DR-4828, FEMA declared federal disaster aid with individual assistance to counties affected by Hurricane Helene from 9/23/2024 and continuing. 20240914-CL Disaster Announcement (Florida Hurricane Helene) – 17 Counties granted IA. On September 28, 2024, with DR-4828, the Federal Emergency Management Agency (FEMA) declared that federal disaster aid with individual assistance has been made available to counties in Florida to supplement recovery efforts in the areas affected by Hurricane Helene from September 23, 2024, and continuing.

But there’s more!

Vermont DR-4826. Washington DR-4823. Georgia DR-4821. Louisianna DR-4817. Connecticut DR-4820. Illinois DR-4819.

On 9/16/2021, with Amendment No. 1 to DR-4817, FEMA declared federal disaster aid with individual assistance has been made available to Louisiana’s Jefferson Parish affected by Hurricane Francine from 9/9/2024, to 9/12/2024. See AmeriHome Mortgage Disaster Announcement 20240909-CL for inspection requirements.

On 9/26/2024, with DR-4826, FEMA declared federal disaster aid with individual assistance to Vermont counties, Caledonia, Essex and Orleans. See AmeriHome Mortgage Disaster Announcement 20240912-CL for inspection requirements.

With DR-4821, FEMA declared federal disaster aid with individual assistance to 8 Georgia counties affected by Tropical Storm Debby from 8/4/2024 to 8/20/2024. See AmeriHome Mortgage Disaster Announcement 20240910-CL for inspection requirements.

PHH Mortgage Announcement Disaster Alert Update 09-25-2024 new disaster declarations for Washington DR-4823 and Georgia DR-4821. Reference the announcement for all disaster declared counties, requirements, procedures, and conditions.

PHH Mortgage Announcement Disaster Alert Update 09-24-2024 includes new disaster declarations for Connecticut DR-4820 and Illinois DR-4819. An additional county added to the declaration for Louisiana DR-4817. Please reference the announcement for all disaster declared counties, requirements, procedures, and conditions.

Capital markets: quiet out there

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South Street Securities LLC is pleased to announce the launch of a trading application available on iOS and Android with a desktop version coming soon to all originator clientele facing SSS. This invitation only trading platform will allow originators to view TBA and specified bond market color, as well as execute trades direct with the South Street trade desk. With a chat feature and trade history, this app is a one stop avenue to help capture your MBS market hedging needs. Please visit here for more information and a trading application preview.

For those watching interest rates, economic data released over the last week showed personal spending rose 0.2 percent during August compared to a 0.5 percent gain in July. For the year, consumer spending is up 5.2 percent while incomes grew 5.6 percent over the period. Inflation remained subdued in August rising a mere 0.1 percent at both the headline and core levels. 

Over the past three months, core inflation has been running at an annualized pace of 2.1 percent as it is trending down towards the Fed’s preferred 2 percent target. Additionally, there were upward revisions to prior years’ spending and income data which showed the consumers have been in a slightly better position than previously reported and could help to explain the resilience in consumer spending. 

Applications to refinance mortgages surged for a second week, and overall applications have been trending higher for the past two months, as more Americans capitalize on the cheapest borrowing costs in two years. The Mortgage Bankers Association’s refinancing index has jumped to the highest level since April 2022, as the contract rate on a 30-year fixed mortgage eased to 6.13 percent, the eighth straight weekly drop and the longest stretch of declines since 2018-2019. That helped boost home-purchase applications by 1.4 percent last week to the highest level since early February. 

The fifth straight weekly advance in the measure points to burgeoning demand in a housing market that’s gradually finding some footing. The contract rate on a 30-year fixed mortgage eased 2 basis points to 6.13%, the eighth straight weekly drop. Lower rates are welcome with all the pent-up demand that exists out there but aren’t expected to be a catalyst for a significant rebound in purchase activity as home prices continue to rise in many areas due to a continued lack of supply. 

This week brings the first Friday of the month which means the September jobs report, potentially crucial in swinging November rate hike odds which are evenly split between 25-basis points and 50-basis points. Before the jobs report, key data releases include ISM PMIs and several job-related releases. Regarding MBS, agency prepayments will be released after Friday's close. Today’s month- and quarter-end session gets under way later this morning with Chicago PMI for September, which will be followed by Dallas Fed Texas manufacturing and remarks from a couple of Fed speakers, including Chair Powell. We begin the week with Agency MBS prices little changed from Friday’s close, the 2-year yielding 3.59, and the 10-year yielding 3.76 after closing last week at 3.75 percent.

Five tips for a woman....

1. It is important that a man helps you around the house and has a job.

2. It is important that a man makes you laugh.

3. It is important to find a man you can count on and doesn't lie to you.

4. It is important that a man loves you and spoils you.

5. It is important that these four men don't know each other.

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, “Lenders and Vendors Must Pay to Play.” 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.)