10.17.24 Make Money to Spend Money; Tavant's Sundeep Mathur on AI Productivity; European Central Bank Rate Cut

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

Today would have been the 65th birthday of comedian Norm Macdonald. And while that may make your head shake, here’s something else that definitely will: Hurricane Milton will result in an estimated $36 billion in insurance claims due to damage from wind, storm surges, and flooding, following Hurricane Helene’s $19 billion. For those without an HP-12C, that’s $55 billion. No, I don’t know, compared to that cost, how much insurance companies earned in premiums in those areas since the last loss. Making money, spending money… To make more money in lending, or even survive, you need to figure out where the money is being spent. Freddie Mac has a report on the cost to originate that you should either skim through or print and read. Speaking of Freddie, the ex-head of the FHFA is being interviewed today, and you can bet that he’ll be talking about possible election-related Agency moves. Mark Calabria is the former director of the Federal Housing Finance Agency, which regulates and supervises Fannie Mae, Freddie Mac, and the Federal Home Loan Banks. He laid the groundwork for a removal of Fannie Mae and Freddie Mac from government conservatorship. (Today’s podcast can be found here, and this week’s is sponsored by Aidium. Your leads are showing signs of intent to buy or refinance a home far before traditional triggers like pulling credit. Aidium's AI Lead Prioritization helps you sift through bad leads and focus on the ones that are ready to transact. Spend your time where it matters most with Aidium. Hear an interview with Tavant’s Sundeep Mathur on providing AI-powered tools that build better borrowers by enabling and empowering consumers with the knowledge, tools, and data needed to make sound financial decisions.)

Employment & transitions

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Citizens is excited to announce that Raman Muralidharan is the new Head of Mortgage. ‌Raman brings extensive mortgage expertise and a strong customer-first, financial and operational mindset. He joins from Guaranteed Rate, where he served as President and Senior Executive Vice President of New Financial Products. Prior to that role, Raman had an extensive career at HSBC where he held various leadership roles including head of mortgage banking. As rates continue to improve, Citizens’ strong leadership team is poised to expand and looking for experienced and talented loan officers in the Northeast, MidAtlantic, Midwest and Florida. Citizens specialty mortgage programs such as condo/co-op financing, rate protection programs with extended rate locks, along with an amazing Private Wealth discount value proposition for high net worth banking clients, ensures you have all the tools to win. Contact Natalia Santilli or visit here.

(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 products

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Storms, aka natural disasters, are wreaking havoc on homeowners and mortgage servicers, as well as the rest of us in the industry. Clarifire’s recent blog entitled, “Disasters Demand Automation for Servicing,” examines how the current stresses of natural disasters can be minimized and demonstrates how proactive servicer adoption of automation can provide immediate relief for both homeowners and servicers. Find out how to solve operational challenges that include automated workout options and results with real-time workflows and meaningful, responsive outcomes for your borrowers.

“Motivate and empower your sales, processor, and underwriting teams with Service 1st. Here’s what we’re talking about @ MBA Annual. Move credit challenged borrowers from ineligible to approved with their own custom action plan. Make absolutely certain you’re taking advantage of soft inquiry credit pulls, some re-issuable into DU & LP. S1 will aid in designing a workflow for your loan programs and channels via our library of technology integrations and custom rule sets. It’s no longer time or cost prohibitive to use IRS tax transcript data in your online application. S1 is the industry’s first agnostic tax transcript platform via the “OG”, TRV® Services. Near-instant 8821 (announcements @ MBA Annual), 4506-C, near-instant IVES, income decisioning tools (Income+), etc. It’s worth the ½ hr. meeting. Join us and we’ll see you in Denver this month!”

As the spooky season rolls around, it’s not just ghosts and goblins you need to worry about… There are haunting mortgage compliance pitfalls lurking in the shadows of your social media strategy! See ActiveComply’s latest blog post 2024 Social Media Scaries for real social media posts that highlight the sometimes darker side of social media advertising in our regulated industry. Findings range from RESPA Section 8 violations to consumer complaints, to good old-fashioned brand reputation issues. Take a peek, if you dare, at these frightening social media violations to ensure similar social media Scaries won't haunt your institution. Do you know what might be lurking under the bed at your institution? Reach out to hello@activecomply.com or schedule a virtual demo today to see real-time social media findings.

Domino’s Pizza sends you a text message when your pizza is ready, but most mortgage lenders don’t send text updates at all. If you’re using Encompass® by ICE Mortgage Technology™, LenderLogix allows you to send out sequenced SMS updates to your borrowers and Realtors without the complexity of an expensive CRM. It’s hard to say you have a modern borrower experience if you’re not sending SMS updates. Fortunately, LenderLogix has you covered. Book some time to see how it works. 

Correspondent programs to look for at the MBA Annual

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Heading to Denver for MBA Annual? Come meet the Longbridge Executive Team! According to Home Mortgage Disclosure Act data, the mortgage industry left $200 million in net revenue behind in 2023. With a wealth of untapped home equity held by seniors, now is the time to stop leaving money on the table and explore the reverse mortgage market. Join Longbridge CEO Chris Mayer and our Executive Team at MBA to learn how you can diversify your business with reverse mortgages with our new game-changing initiative, A Blueprint for Reverse Mortgage Success. Whether you're new to reverse or looking to sharpen your strategies, we have the tools and support you need to excel in today’s competitive market. Set up a meeting at MBA with the Longbridge Financial, LLC (NMLS #957935) leadership team to learn more! Can’t make it to MBA? Contact Adrian Prieto, Longbridge SVP of Wholesale & Third-Party Relationships.

“Meet with Planet at ABS East to maximize your portfolio performance. Planet's innovative approaches to asset management and servicing can enhance your investments. Our advanced platform provides real-time insights and efficient servicing across agency, government, non-QM, and commercial loans. Led by industry veterans, we deliver flexible, data-driven strategies to help you achieve superior returns. Connect with our team at ABS East.”

“Arc Home will be at the MBA Annual in Denver on October 28-29, and we’d love to connect with you! We’re also hosting a Bowling and Cocktail Party at the Denver Athletic Club on Monday, October 28th, from 4pm to 6 pm. Located just moments away from the convention center, this is the perfect opportunity to unwind, enjoy some friendly competition, and network with industry peers. Email Gerard McGeever to secure your spot for this fun event. In addition, there are a few slots left to meet and discuss Arc Home’s innovative programs like HomeEQ and other Non-QM and Non-Agency solutions. Don’t miss the chance to meet with our team during the conference!  We hope to see you in the Mile High City.”

STRATMOR & loan repurchases

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Did you know an investor can force a lender to repurchase a loan if appraisal defects are discovered? That could cost lenders anywhere from $30,000 to $60,000 per loan. Even with Reps and Warrants, the lender is still responsible for things like accuracy and completeness of all data on the appraisal, which means it must still be reviewed. STRATMOR Group is looking to better understand how lenders are handling and being affected by loan repurchases, particularly due to appraisal defects, as well as the potential for reducing underwriting costs on appraisal reviews. They’re asking lenders to take just a few minutes to take a brief survey to help them better understand just how much potential for time and cost savings might be hiding in this area. Once they’ve collected and analyzed the data, STRATMOR will share a summary report with you. Just a few minutes of your time will help shape the future of the space. Take the survey.

Vendors raising money, forging alliances

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Splitero, the financial technology company that provides homeowners better options to access their home equity, announced today that it has a $300 million strategic investment from funds managed by Antarctica Capital. And why not? U.S. homeowners collectively hold $11.5 trillion* of accessible home equity. “Splitero is making it easier than ever to access that equity by providing homeowners with a lump sum of cash in exchange for a share of their home's future value. These Home Equity Investments (HEIs) allow homeowners to use their home equity to better their lives by paying off debt, renovating a home, or using their equity to achieve their financial goals without selling their home or refinancing a low-interest rate mortgage. *According to data from ICE Mortgage Monitor. 

“Splitero’s innovative Maturity Match™ aligns homeowners’ HEI term length with their senior mortgage timeline so they don’t have to repurchase their HEI option before paying off their mortgage. Homeowners can repurchase anytime within their term without penalty, giving them the flexibility to repurchase at their convenience.

Word also went ‘round that Stairs Financial, an industry-leading marketplace for 1st time buyers, has been recognized as a certified integration partner of the Optimal Blue PPE, the mortgage industry’s most widely used product, pricing, and eligibility engine. “This collaboration will enable Stairs Financial to display lender 1st-time buyer and down payment assistance programs in a complete and transparent way, not currently offered anywhere in the market.

“This strategic partnership underscores Stairs Financial’s commitment to utilizing advanced technology to provide comprehensive solutions for 1st-time homebuyers. By integrating the Optimal Blue PPE with Stairs Financial's user-centric marketplace, prospective homeowners can expect a seamless and efficient experience as they choose the right loan program and lender for their needs.”

Capital markets: the consumer’s looking okay out there

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Trading within the To-Be-Announced (TBA) mortgage-backed securities market at specific price levels during volatile market conditions offers a streamlined process and greater confidence. Agile, a groundbreaking fintech bringing mortgage lenders and broker-dealers onto a single electronic platform, announced the launch of limit orders as a new quote request option for all users. This functionality improves execution and efficiency and ultimately, mortgage lender profitability. To further prepare for upcoming election-related market volatility, join Agile on October 22, at 11 AM PT for the latest Agile Trader Talk Webinar for a discussion on how the election, no matter the outcome, could impact the Mortgage-Backed Securities (MBS) market.

Rates? Atlanta Federal Reserve President Raphael Bostic has projected a single 25 basis point interest rate cut for the remainder of the year, contrasting with the broader expectation of a 50-basis point reduction, but said he was "keeping options open."

It was a quiet day yesterday in the bond markets. There was a little bit of volatility following the generally positive release of the September import-export price indexes, though participants were largely looking ahead to today’s ECB policy decision and the heavy slate of economic releases. Import prices declined 0.4 percent month-over-month in September following a 0.2 percent decline in August, while export prices fell 0.7 percent month-over-month in September following a 0.9 percent decline in August.

We also learned yesterday that after eight straight months of easing, mortgage credit availability tightened slightly in September, according to the MBA’s Mortgage Credit Availability Index. The index fell 0.5 percent month-over-month to 98.5 from 99.0. Still, it remains higher by 6.9 percent from last December’s 12-year low of 92.1. Additionally, for the third straight month the index was higher on a year-over-year basis, at 1.3 percent, after years being lower as credit conditions held extremely tight.

Today’s packed economic calendar of data and events that could cause some amount of volatility, especially if it impacts rate cut expectations. We’ve already received several releases, including Philly Fed manufacturing for October, retail sales for September (+.4 percent, ex-gas & auto +.2 percent), and weekly jobless claims (241k with a back-month revision higher). Retail sales were expected to have rebounded in September after a lackluster increase in the prior month. Core retail sales, which exclude the volatile auto and gas components, were expected to have risen at a moderate pace and ended the third quarter on a positive note.

World markets have also received the European Central Bank’s latest monetary policy decision (a cut to 3.25 percent) and President Lagarde’s press conference. Sure enough, the market was priced for a 25-basis points rate cut with another one expected in December. Later today brings industrial production and capacity utilization for September (which probably pulled back last month after a big increase in August), August business inventories (expected at 0.3 percent month-over-month), the October homebuilder sentiment index (which probably improved further on lower mortgage rates), Freddie Mac’s Primary Mortgage Market Survey, Treasury auctions that will be headlined by 20-year bonds and 5-year TIPS, and remarks from Chicago Fed President Goolsbee. After the early economic news we have Agency MBS prices worse about .125 from Wednesday, the 10-year yielding 4.07 after closing yesterday at 4.02 percent, and the 2-year is unchanged at 4.00.

(Warning: Rated R. No complaints please.)

Two old guys, one 80 and one 87, were sitting on their usual park bench one morning. The 87-year-old had just finished his morning jog and wasn't even short of breath.

The 80-year-old was amazed at his friend's stamina and asked him what he did to have so much energy.

The 87-year-old replied, "Well, I eat rye bread every day. It keeps your energy level high, and you'll have great stamina with the ladies."

So, on the way home, the 80-year-old stops at the bakery. As he was looking around, the lady asked if he needed any help. He said, "Do you have any rye bread?"

She said, "Yes, there's a whole shelf of it. Would you like some?"

He said, "I want 5 loaves."

She said, "My goodness, 5 loaves...by the time you get to the 5th loaf, it'll be hard."

He replied, "I can't believe it, everybody in the world knows about this stuff but me."