10.16.24 Fairway Independent Settlement; Aidium's Spencer Dusebout on Tech Investment; Supply Not Flourishing

Aidium's CRM and Business Intelligence platform is the go-to system for lenders and enterprises serious about embracing technology to drive progress. With 100s of integrations, a simple-to-use automation builder, reporting suite, and true AI for lead prioritization - it’s easy to see why Aidium was built for the loan officer and embraced by the enterprise.

Transcript

An attorney will tell you, “Never miss a good chance to shut up.” Today I head to the
Portland/Vancouver area for a few days with Banner Bank. Oregon has 12,000 licensed
attorneys, Washington 27,000; number of regulators and administrators unknown. (Hear Mark
Calabria interviewed tomorrow.) Banking Law 360 reported that, “At a tough-talking appearance
in Utah on Friday, Consumer Financial Protection Bureau Director Rohit Chopra said he doesn't
sweat potential legal challenges to his agency's rules and suggested some industry-side
attorneys can be ‘leeches’ who relish compliance uncertainty if it boosts their billable hours.”
Others will say, “Make the regulations clearer and there won’t be any uncertainty.” Still others
will tell you that the CFPB, fearing a change in presidential administration, will be ramping up
enforcement actions and fines. The CFPB is rumored to be cutting deals on settlements now,
because regulators are worried they will all be undercut if Trump wins. Yesterday the CFPB
announced that it and the Department of Justice took action against Fairway Independent
Mortgage Corporation. More below. (Today’s podcast can be found here, and this week’s is
sponsored by Aidium. Aidium's CRM and Business Intelligence platform is the go-to system for
lenders and enterprises serious about embracing technology to drive progress. Aidium boasts
hundreds of integrations, a simple-to-use automation builder, reporting suite, and true AI for lead
prioritization. Hear an interview with Aidium’s Spencer Dusebout on how technology is helping
lenders increase margins, improve operational efficiency, and better serve clients.)
Employment & transitions
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Primis Mortgage is boosting is ramping up its nationwide search for top mortgage talent,
starting with a key promotion. Lindsey Reid was promoted to talent acquisition specialist after
an all-star start with Primis Mortgage as an onboarding specialist. In her new role, Reid will work
closely with Chris Blevins, national sales director, to find high-performing loan officers that are
looking for a spot where they can reach their highest potential. If you're reading this, chances
are you know what you want from a mortgage company. With more than 100 years of combined
industry experience, Primis Mortgage knows exactly how to put their team in positions to
succeed, with robust marketing resources, in-house support teams, and competitive products
and pricing. If you're awesome, and looking for a new company to call home, reach out to
Lindsey to get the ball rolling and visit our website to learn more.
Sure, the mortgage industry is.... shall we say... unpredictable right now. We all know it. But
there’s something you can do about it! With the potential for mortgage rates to boost
homebuying this quarter, building strong relationships with real estate agents is more
important than ever! Lucky for you, the majority of Motto Mortgage offices are connected
with established real estate brokerages. That means more agent connections without extra
time and energy. And you know what else that means – more time for building business. Motto
Mortgage brokerages are hiring talented loan originators in: AK, AZ, CA, CO, CT, FL, GA, ID, IL,
IN, KS, KY, MA, MI, MN, MO, MS, NC, ND, NE, NJ, NM, NV, OH, OK, OR, PA, SC, TN, TX, UT,
VA, WA, & WI. Click HERE for more information on becoming a Motto LO!
Industry vet Brian McKinney has joined PrimeLending as EVP, Growth and Strategic
Development, a position that sprang from part of Prime’s “ongoing efforts to optimize business
practices and explore new revenue opportunities with the ultimate goal of driving growth.”
Congratulations!

(As a reminder, anyone searching for employment can post their resume at no charge at
www.lendernews.com, and potential employers can view all resumes for several months for only
$75.)
Lender and broker software, services, and sponsored events
_________________________________________________
Now more than ever, mortgage lenders are investing in technology to drive efficiencies across
their business and deliver experiences that create customers for life. In this episode of the
Fintech Hunting podcast, technology and industry experts dive into what you should be
prioritizing in your product and pricing strategies. Tune in now to discover best practices for
selecting the right PPE solution, tips for a successful implementation, and how ICE is
leveraging automation to help clients scale effectively.
Changing markets. Changing leaves. Unchanging service. Use wemlo®, a third-party
mortgage loan processing company, for the steady processing support needed to
navigate shifting market conditions. At wemlo, we’re all about providing scalable processing
support that adapts to your evolving needs. Mortgage brokers can count on wemlo processors
to be available when business ramps up and easily be paused when the market slows down.
Best of all, there is no subscription fee or minimum loan requirement to work with
wemlo. Want adaptable assistance tailored to your changing needs? Book a 1:1 wemlo demo
today.
ICYMI: Optimal Blue launched two new podcasts to help optimize your advantage and
maximize your understanding of the mortgage industry. Optimal Insights, a weekly LinkedIn
video series and audio podcast, provides timely market analysis that impacts loan originators
and capital markets professionals. Hosted by Optimal Blue experts, this podcast discusses the
latest trends, real-time data, and best practices to keep you ahead in the dynamic mortgage
landscape. Market Advantage, released monthly, complements the popular Market Advantage
mortgage data report with additional commentary and guest interviews, offering deeper data
insights and discussions with industry experts. The first episode, released on Oct. 8, featured
Joel Kan, vice president and deputy chief economist at the Mortgage Bankers Association
discussing MBA’s Application Survey Index and September’s rate lock activity. Both Optimal
Insights and Market Advantage podcasts are available on all major podcast platforms. Visit the
Optimal Blue Podcasts page for more information.
Costs for income & employment verifications have skyrocketed, ranging from $49 to $123 per
request. And if there are two borrowers on the application, that price can easily hit $492. Just a
few years ago, verifications were around $20, so the increase is being felt across the industry.
But there's good news! Josh Byrom, SVP Technology & Innovation, Prosperity Home
Mortgage, shares his experience working with Truv, a vendor partner that has helped
reduce verification costs by as high as 90%. Hear Josh share his experience working
with Truv here. 
Offerings to look for at the MBA Annual
_________________________________________________
PlainsCapital Bank National Warehouse Lending, a subsidiary of Hilltop Holdings (NYSE:
HTH), is committed to providing mortgage lenders with a sustainable funding source in
an uncertain market. With over 30 years’ experience, a well-capitalized, diversified financial

holding company, PlainsCapital Bank National Warehouse Lending provides confidence to meet
our mortgage lending partners funding needs.  With exceptional operational performance, and a
focus on relationship-driven business geared towards long-term success, we do not dwell on
unnecessary fees. With PlainsCapital Bank National Warehouse Lending there are NO non-
usage fees, NO application or renewal fees, NO third party due diligence fees and NO interest
charged on the day your loan funds.  If you attending the MBA Annual Conference in Denver
and interested in learning more about PlainsCapital Bank National Warehouse Lending please
contact Deric Barnett or John White.
In-the-booth: Dara by Sagent experience, only at the MBA Annual. You read that right.
Sagent is sharing a peek at Dara, its unified servicing platform, exclusively for MBA
Annual ‘24 attendees who request to see it at booth #401. Dara's end-to-end default
servicing capabilities include a loss mitigation solution that leverages AI to make the hardship
application painless for homeowners, then gives them real-time updates and visibility into their
status on the path to resolution. Delivering greater transparency and opportunities for
personalized service, Dara turns hardships and the loss mitigation response into opportunities
to strengthen relationships with homeowners. And in addition to the Dara experience, booth-
goers can snag Sagent's latest socks + local treats! For more information on what
else Sagent will be up to at MBA Annual, click here.
“Heading to Denver for MBA Annual at the end of the month? Schedule some time to meet
with the Covius team and learn more about why we are trusted by 8 of the top 10 lenders and
servicers, 14 of the top 20 banks and thousands of settlement agents and attorneys. Covius’
solutions are designed to help servicers control risks and assure compliance. They include
default title, loss mitigation, title curative, REO & auction, document prep, compliance solutions
and more. Click here to schedule a meeting and discover how our innovative solutions can
streamline your mortgage operations.”
FundingShield, the market leader in wire & title fraud prevention, released its Q3-
2024 report showing nearly half (46%) of transactions had deficiencies. During Q3-2024, a
record high 45.1% of transactions had CPL issues and 8.1% had wire/bank account related
risks. The heightened risk illuminates the need for real-time source data-based verifications
leveraging trusted data. “Data accuracy and a process to validate data is paramount in the
mortgage and real estate finance industry. Automation, collaboration, and process improvement
can yield better customer experience and pricing. However, without accurate data sets and real
time data verification leveraging live repositories, these goals will not be realized. Our verified
data allows lenders to make better real time decisions that reduce wire fraud risk and drive
process improvements (with cost savings), which is the epicenter of responsible and efficient
automation and AI initiatives.,” Shared, Ike Suri CEO. Contact Sales@fundingshield.com for
demos and free trials, Meet us at the MBA Annual in Denver to learn more about our
solutions.
“The annual MBA Convention is just around the corner and the Citi Correspondent
Lending Team can’t wait to meet with existing and prospective clients, especially those
with a shared passion for supporting underserved markets. Citi remains focused on
responsible growth and the expansion of our Community Lending platform. In fact, we recently
introduced our newest addition-our Special Purpose Credit Program. The SPCP is designed to
support home financing needs of borrowers with subject properties in designated Majority-
Minority census tracts within select markets. With four loan plan options (including our
proprietary HomeRun product) and features that include closing cost assistance and premium
pricing for qualified loans, this new program can help create a more affordable path to

homeownership for your borrowers. Schedule some time to talk with us at the MBA or complete
our Prospective Client Questionnaire to learn more about all the opportunities Citi has to offer.”
What the CFPB & DOJ say, and what Fairway Independent says
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Before we dive into the latest news, here’s a quote from an industry vet about CFPB settlements
in general. “The Bureau twists the truth for its own gain (both from a political and money
standpoint). Settlements are more about the practical reality of fighting the Bureau than anything
else: what is the cost versus what is achieved by a quick end. The CFPB should be rooting out
the discrimination that we all know exists. That is not what the CFPB usually does. What the
Bureau often does is a mockery of the reason for its very existence.”
The Consumer Financial Protection Bureau (CFPB) and the Justice Department (DOJ) took
action to “end Fairway Independent Mortgage Corporation’s illegal mortgage lending
discrimination against majority-Black neighborhoods in the greater Birmingham, Alabama area.
The CFPB and DOJ allege that Fairway illegally redlined Black neighborhoods, including
through its marketing and sales actions. Fairway’s actions discouraged people from applying for
mortgage loans in the Birmingham metropolitan area’s Black neighborhoods. If entered by the
court, the settlement announced today would require Fairway to pay a $1.9 million civil penalty
to the CFPB’s victims relief fund. Fairway would also be required to provide $7 million for a loan
subsidy program to offer affordable home purchase, refinance, and home improvement loans in
majority-Black neighborhoods… The CFPB and DOJ allege that Fairway violated the Equal
Credit Opportunity Act, the Consumer Financial Protection Act, and the Fair Housing Act.
Fairway Independent responded. “Fairway Independent Mortgage Corporation, named #1 for
customer satisfaction among mortgage origination companies in the J.D. Power 2023 U.S.
Mortgage Origination Satisfaction Study, responded to an announcement released by the CFPB
and Justice Department.
“In 2021, the first full day after the Biden Administration took office, the CFPB (‘Bureau’) began
an investigation into Fairway Independent Mortgage Corporation (‘Fairway’ or the ‘Company’) to
determine whether the Company’s mortgage lending activities in the Birmingham-Hoover, AL
Metropolitan Statistical Area (“Birmingham MSA”) were being conducted in compliance with the
Equal Credit Opportunity Act (‘ECOA’).
“The government agencies' allegations in the complaint, filed days before the impending
Presidential election, were provided to Fairway for the first time only after settlement was
reached. The complaint significantly mischaracterizes the matter at issue and appears to be
intentionally inflammatory in nature. For one, the complaint characterizes Fairway's actions as
willful and reckless, a claim that was mutually rejected by the parties prior to settlement. In
addition, the complaint characterizes Fairway’s actions as willful and intentional, despite the
government agencies’ failure to identify any evidence to support such a claim. Fairway is
disappointed by these statements in the complaint, which suggest bad faith by the part of the
government agencies.
“In bringing the investigation, the Bureau had reviewed the loan application data that Fairway
had previously reported under the Home Mortgage Disclosure Act and performed an analysis
that compared the ratio of Fairway’s lending in majority-White versus majority-Black census
tracts to the White/Black ratio of other lenders. This analysis focused on quotas of White/Black

census tract lending rather than actual volume of applications and originations in majority-Black
census tracts.
“Despite a multi-year investigation, which included a referral to the U.S. Department of Justice
(DOJ), the government agencies did not identify any evidence of redlining or other
discrimination by Fairway. Rather, the government agencies relied on a quota analysis to allege
that Fairway was not meeting the needs of residents of majority-Black census tracts, in
contravention of the U.S. Supreme Court’s 2023 decisions regarding affirmative action.
“The government agencies refused to consider the fact that Fairway took more loan applications
and made more loans, in terms of number of loan units, in majority-Black census tracts than any
other non-bank lender with a physical presence in the Birmingham MSA. The government
agencies also refused to consider Fairway’s lending performance among residents of majority-
Black census tracts who may have chosen properties outside of their neighborhoods and
elsewhere in the Birmingham MSA, which indicates the government’s preference for furthering
racial segregation.
“Fairway vigorously defended itself against the government agencies’ allegations and continues
to deny that the Company engaged in any discriminatory behavior. Fairway also maintains
strong disagreement with the government agencies’ legal and statistical approach to identifying
potential discrimination. However, to resolve the matter and curb the further expenditure of
resources, Fairway determined that a settlement with the Bureau and the DOJ would be the
most appropriate solution.
“In part, the settlement allows Fairway the opportunity to redirect financial resources to majority-
Black neighborhoods via loan subsidies, consumer financial education, and community
development. Fairway hopes that these efforts will further increase lending opportunities for
those seeking to purchase properties in majority-Black census tracts of the Birmingham
MSA. However, the settlement does not authorize the agreed-upon loan subsidy to be offered to
residents of majority-Black census tracts unless they remain in a property located in such
tracts.”
Capital markets: apps & issuance are not flourishing
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What investor wants to pay 103 if the loan is going to refinance or pay off in 4 months? The
preliminary prepayment outlook for October shows that speeds are expected to jump 12 percent
to 13 percent on average from September with the largest increases in higher coupons. More
than offsetting weakening seasonals are a 4.8 percent increase in the number of collection days
and an average 28 percent month-over-month surge in refinances.
We learned this morning that mortgage applications decreased 17.0 percent from one week
earlier, according to data from the Mortgage Bankers Association’s (MBA) Weekly Applications
Survey. So much for that refinance wave. Comparing the current refinance index levels to their
trailing decade averages, while the headline and conventional indexes are 35 percent and 49
percent lower, respectively, the government index is 23 percent higher. That is where both the
most prepayment risk and business opportunity lie.
Net mortgage issuance through the end of August totals $124.7 billion for the year, and with an
expected run rate of $166 billion through the end of December, which puts it very far from the

$235 billion net seen in 2023. A continued lack of home building and scarcity of overall
purchase-sourced mortgage bonds being created should keep supply muted. One silver lining is
that Agency MBS gross issuance in September came in at $100.6 billion, the second month in a
row with over $100 billion in gross issuance (August saw $109.8 billion.) This has not happened
since late summer 2022. Ginnie Mae aggregate issuance hit $43.3 billion, highest since June
2022 and up 8.9 percent compared to August. Conventional aggregate issuance dropped 18.2
percent from August to $57.3 billion, with Fannie Mae down 26.1 percent and Freddie down
10.5 percent, respectively.
Today has an uneventful calendar that includes bank earnings, but did kick off already with
import and export prices for September (). The only other point of note today is a Treasury
buyback in 3- to 5-year coupons for up to $4 billion. We begin the day with Agency MBS
prices better .125-.250 and the 10-year is yielding 4.00 after closing yesterday at 4.04
percent; the 2-year is at 3.92.

Sometimes it takes me all day to get nothing done.

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Spotify).
qoɹ
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