11.18.24 Industry Chatter; First Street's Matthew Eby and Amanda Johnson on Climate Risk Modeling; Prepayment Speed by Coupon

Thanks to today's podcast sponsor, PHH Mortgage. For over 35 years, PHH Mortgage has provided industry-leading mortgage services. They are one of the largest servicers of residential mortgages in the United States and offer a variety of solutions for the entire mortgage lifecycle. If you are looking for a Correspondent Lending partner or an experienced, award-winning Subservicer who can manage your forward and reverse, residential and commercial, and performing and non-performing loans look no further than PHH. Learn more at business.phhmortgage.com.

Transcript

“I didn't make it to the gym again today. That makes five years in a row.” I did, however, make it to the aerodrome over the weekend, which involved travel (not on Spirit) from Ohio to Nevada, and also a look in the mailbag. “Rob, are you hearing something about some states contemplating requiring audited financials from brokers?” I have heard rumblings of it, but no one seems to have any definite information. If the regulatory burden shifts from the federal government to the state level, it wouldn’t surprise me. “Rob, do you know the reason why the Agencies aren’t contemplating having lenders just use one credit bureau rather than going from tri-merge to bi-merge?” I don’t know. You should ask your Fannie or Freddie rep. The three credit bureaus certainly put lenders and investors in an interesting situation currently, especially when costs go up. There is a school of thought that says the industry should have moved from tri-merge, skipped bi-merge, and gone to a single credit bureau’s result. (Today’s podcast can be found here. This week’s is sponsored by PHH Mortgage. If you are looking for a Correspondent Lending partner or an experienced, award-winning subservicer who can manage your forward and reverse, residential and commercial, and performing and non-performing loans look no further than PHH. Hear an interview with First Street’s Matthew Eby and Amanda Johnson on climate risk modeling advancements and how those models impact borrower, lender, and investor behavior.)

Employment, promotions, a “step down”

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There is big expansion news for US Mortgage Corporation as it welcomes Paul Laprade as a SVP, Divisional Manager. Paul brings over 30 years of mortgage industry expertise and a record of strong, visionary leadership managing high volume teams across the northeast that will help propel US Mortgage Corporation’s mission that “Everyone deserves a roof over their head.” Paul has built a career distinguished by his commitment to exceptional service and his deep understanding of the mortgage landscape to support Loan Officers. Known for his proven sales strategies and steadfast dedication to help Loan Officers, Paul’s leadership style aligns seamlessly with US Mortgage Corporation's Core Values and client-focused approach. In his new role, Paul will be instrumental in expanding US Mortgage’s footprint, especially in New England, with a focus on helping Loan Officers to grow their business. If you would like to learn more about US Mortgage Corporation’s expansion plans and how you can be a part of their growth, contact Nino Saso, Chief Production Officer.

Celebrating a Decade of Success: Svetlana Marinkovic at SNMC! SecurityNational Mortgage Company proudly celebrates Svetlana Marinkovic's 10-year tenure and her first year as Executive Regional Manager. Her journey highlights SNMC's commitment to fostering growth and empowering women in leadership. Svetlana has transformed the Summit Region into one of SNMC's most successful territories. Her leadership has driven the region to thrive with innovative recruitment strategies and high-performing teams. Reflecting on her journey, she noted, "Reaching 10 years isn’t just a milestone, it’s a testament to growth and resilience. Here, we push boundaries, we celebrate wins, and we keep moving forward." With fellow Executive Regional Manager Joe Gregory by her side, SNMC looks forward to continued success and growth. "We are excited for Svetlana's future growth and impact," said Joel Harward, SVP. "Her dedication and vision exemplify our values and drive success." Join Our Success Story: Discover Your Potential at SNMC.

Sam Valverde, Acting President of Ginnie Mae, will step down, effective November 30, 2024. Valverde has served in the Biden-Harris Administration as the Acting President of Ginnie Mae since May 2024, after previously holding the roles of Principal Executive Vice President and Chief Operating Officer since joining the organization in March 2022.

Fairway Independent Mortgage Corporation announced the promotion of 28-year industry vet Linda Davidson to President of National Branch Optimization – Operations. Linda will continue to lead her branches and region while spearheading strategic initiatives at the corporate level to drive operational efficiencies and solidify Fairway's position as the industry leader in operational support.

Cornerstone Home Lending, a division of Cornerstone Capital Bank, has promoted Jay Crowell to the newly created role of president – national retail division to drive the strategy and continued growth of Cornerstone’s national retail and Realtor affiliate sales and operations.

(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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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 EarlyAccess 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.

California: Lenders, unlock a new revenue stream by offering GSFA Down Payment Assistance (DPA) programs. With up to 5.5% in assistance, no additional compliance checks, and flexible credit score requirements (as low as 620), this program is perfect for FHA, VA, USDA, and Conventional loans. Best of all, there are no first-time homebuyer restrictions, making it accessible to a broad range of clients. Don’t miss out on this opportunity to expand your business and help more borrowers achieve homeownership. GSFA offers free online training to help you integrate DPA into your offerings quickly and easily. Start closing more loans and reaching new clients today! Visit www.gsfahome.org to learn more and register for training.

Scale your growth in 2025 with mortgage-specific reporting and insights. In our competitive industry, timely and accurate information is crucial, but analytics tools and teams can be costly and lack mortgage-specific stats. Maxwell’s comprehensive data reporting solution, Maxwell Business Intelligence, unlocks new growth opportunities with actionable, data-driven insights. It is the only business intelligence tool built to address the unique challenges faced by mortgage lenders, enabling you to streamline operations, enhance decision-making, and boost profitability. Schedule a no-obligation demo of Maxwell Business Intelligence today.

On November 20, at 2PM EST, join America First Credit Union's SVP of Mortgage Lending, Austin Coleman, as he discusses how AFCU streamlined its lending processes and reduced costs. Learn about the challenges AFCU faced, including increased post-COVID costs such as the need for more efficient verification solutions. You'll hear Austin discuss the benefits AFCU achieved Truv using VOIE and Doc Upload products, which led to 80% cost savings per loan file and faster loan processing times. This session will cover the implementation journey, best practices for onboarding loan officers, and the significant impact on conversion rates and closing timelines. Perfect for credit unions and lenders exploring technology-driven efficiencies in mortgage and home equity lending. Come join the conversation!

Correspondent & wholesale programs

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“Struggling with the current rate environment? Figure’s platform can help you thrive. Offer your customers the ability to tap their equity fast without losing their low-rate mortgage, while you earn your commissions. Leading lenders are already leveraging Figure’s HELOC platform. Our streamlined, customer-driven process is low-touch and can be completed in just a day. With an application time of as few as 5 minutes, online income and property verification, autopay, and credit union discounts, plus e-notary in most states, our platform provides competitive rates and a fast process. Elevate your offerings and partner with Figure, email Anthony Stratis to get started!”

“AnnieMac Cash2Keys Now Includes FHA Loans: Empower Your Clients with the Advantage of a Cash Offer! Great news! AnnieMac Home Mortgage's Cash2Keys program has expanded to include FHA loan eligibility, making it easier than ever for your clients to compete with cash offers, even if they’re first-time buyers or don't qualify for conventional loans. With Cash2Keys, you can help a wider range of clients present a strong, competitive cash-backed offer, using AnnieMac’s capital to strengthen their bid. No upfront cash required! Once the offer is accepted, we transition the cash purchase smoothly into a mortgage, streamlining the process for both you and your clients. Our goal? Making you and your clients stand out in today’s competitive market. Let’s work together to expand your client base and close more deals! Learn More About Cash2Keys.”

Webinars, training, and in-person events this week

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A good place for longer term conference planning is to start is here for in-person events in the future.

Technology and innovation in residential lending are the focus of Now Next Later Mondays at 1pm ET.

Tomorrow and all Tuesdays at 11am PT, two veteran LOs discuss all things mortgage with Industry Leaders: Mortgage Pros 411 with Audrey Boissonou and Kevin Casey. This week has HUD’s Julia Gordon!

The skills that have propelled your team’s success up to this point differ from those required to reach the next level of success. Join Andrew Oxley on Tue, Nov 19, 1-2PM CT for Part 2 of The 7 Deadly Sins of Leadership to find out how to unlock the full potential of your team.

Join MeridianLink® tomorrow at 11 a.m. ET for “Timing the Upgrade: How Long Does a Mortgage LOS Upgrade Really Take?”, a webinar exploring key elements of the mortgage LOS upgrade process, as well as tips to help you optimize your operation every step of the way: Learn More & Register Today!

Join MMBBA for Transform Your Sales: Redefine Your Operations Process for Maximum Success, an exclusive session led by Brendan McKay, Owner of McKay Mortgage, November 19th 9:30 - 10:30 AM at Brews and Barrels in Gaithersburg, MD. Designed specifically for loan officers and brokers, this event will dive into the key elements of optimizing your operational processes to drive efficiency and increase referrals.

Join NAMB & Cindy Ertman for an informative free webinar, tomorrow at 2:30pm ET. This exclusive training with mortgage success coach Cindy Ertman is designed to help you set & achieve your biggest business goals. Cindy will lead a focused session on goal planning & setting yourself up for success in 2025. 

“Join us tomorrow for the Originator Tech Deep Dive and discover how AngelAi’s cutting-edge AI platform can streamline your workflow and boost your business. We’ll show you how AngelAi tackles key tasks that often consume valuable time. Don’t miss this chance to revolutionize your operations. Register here.”

Explore how to elevate sales culture through enhanced accountability and leadership strategies. In an interactive webinar, Wed, Nov 20, 10-11AM PST., Dr. Bruce will share key practices that drive consistent loan officer performance, focusing on what it takes to create a high-performing, results-driven team.

FreddieMacCONNECT, Freddie Mac Single-Family's premier conference, is back on

November 19 – 20. Last year over 3,000 industry professionals convened to learn more about Single-Family’s innovative solutions, mortgage offerings and initiatives focused on addressing and solving dynamic market challenges to advance the housing industry.

If someone located in a Presidentially Declared Major Disaster Area had their home destroyed, they can leverage an FHA 203(h) mortgage program to receive up to 100% financing for the purchase of a new residence. Register for Plaza’s FHA 203(h) Loan Program for Disaster Victims, Wednesday, November 20, 11:30 AM PT / 2:30 PM ET.

If you’re in Eastern Missouri, on Wednesday, November 20th the St. Louis MBA is having its luncheon. Come on by!

In Partnership with Freddie Mac Single-Family, AmeriHome Correspondent is presenting Navigating Today’s Appraisal Challenges (And What's in Store for Tomorrow), Wednesday, November 20, 10 -11 am PST. Hear the latest on appraisal challenges, changes, and tips to overcome them.

Looking for more in-depth commentary on weekly mortgage news? Register here for Wednesday’s 11AM PT "Mortgage Matters: The Weekly Roundup” presented by Lenders One. Tune in to a conversation with Dan Sugg, CMB, Michigan First Credit Union!

On November 20 at 2pm EST, join America First Credit Union's SVP of Mortgage Lending, Austin Coleman, as he discusses how AFCU streamlined its lending processes and reduced costs. You'll hear Austin discuss the benefits AFCU achieved Truv using VOIE and Doc Upload products, which led to 80% cost savings per loan file and faster loan processing times. This session will cover the implementation journey, best practices for onboarding loan officers, and the significant impact on conversion rates and closing timelines. Come join the conversation!

On Thursday, November 21, the MBA Kansas City is having its annual Membership Luncheon at 11:30 at the 180 Room at Joes KC BBQ in Olathe. Have a bite and say hello.

Join TMBA,  November 21, 11:30 am - 12:30 pm, for a crucial webinar focused on understanding and implementing the new FHFA and HUD Reconsideration of Value (ROV) policies. With these regulations coming into effect (August 29, 2024, for GSE loans, and September 2, 2024, for FHA loans) it's essential for financial institutions to align their appraisal processes with the latest standards. This webinar features a panel of industry experts who will provide an in-depth analysis of the regulatory landscape, share effective strategies for ROV implementation and discuss best practices to optimize your institution’s internal operations.

Register now for RiskExec Connect 2024, a free half-day virtual event being held on Thursday, November 21 from 1:00 PM – 5:00 PM ET. Attendees will hear from industry leaders and experts as they discuss and inform on the latest regulatory compliance hot topics including post-election implications, appraisal bias and reconsideration of value, CRA final rule and more.

Thursday will be another episode of The Big Picture at 3PM ET. Rich Swerbinsky hosts a variety of guests. You can click here to register for Thursday’s 3 PM ET show. This week’s show has Bronwyn Morrissey, “a seasoned mindfulness coach and spiritual seeker who has achieved profound awareness on the path to the true self.”

Friday the 22nd, listen in to opinions (Last Word Fridays at 1pm ET) from Kevin Peranio and Brian Vieaux! Register here.

End this week with The Mortgage Collaborative’s The Fix with Melissa Langdale covering current events in the mortgage market for 30 minutes starting at noon PT.

Chrisman Commentary is pleased to bring you a variety of video shows hosted on Zoom throughout the week. Take your pick: We have a show focused on technology and innovation (Now Next Later Mondays at 1pm ET), origination (Mortgage Pros Tuesdays at 2pm ET), big-name interviews (Mortgage Matters Wednesdays at 2pm ET, presented by Lenders One), headline news (The Big Picture Thursday’s at 3pm ET), opinion (Last Word Fridays at 1pm ET), advisory services (Advisory Angle first Tuesday of the month at 2pm ET, presented by STRATMOR Group), capital markets (Capital Markets Wrap second Tuesday of the month at 3pm ET, presented by Polly), regulation and compliance (Regulation Central third Tuesday of the month at 3pm ET), and reaching the next generation of homeowners (Mortgages with Millennials last Tuesday of the month at 1pm ET, presented by The Mortgage Collaborative). (If you don’t see a presenting sponsor, please reach out to Chrisman LLC’s Anjelica Nixt to inquire about opportunities.)

Capital markets: prepayment speeds impact pricing

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Last week we were reminded that inflation is not going away quietly and that a December Fed Funds cut is "not a done deal." The Consumer Price Index (CPI) increased 2.6 percent over the last twelve months which was the first annual increase since the first quarter of this year. Core services were up 4.8 percent over the previous twelve months and shelter increased 4.9 percent over the same period. Meanwhile, goods prices were unchanged during October. Turning to economic output, industrial production was down 0.3 percent in October and September’s data was revised lower as well. Manufacturing continues to struggle and sits 1.7 percent below its 2017 level. However, consumer spending was robust in October, increasing 0.4 percent. That, combined with an upward revision to September’s data has led to upward revisions to expected GDP growth for the third quarter.

In October, Ginnie Mae II 30-year mortgage-backed securities saw a 19 percent increase in prepayment speeds, rising from a 10.9 1-month CPR in September to 12.9. These MBS primarily consist of VA and FHA loans, which show differing prepayment trends due to distinct program features and borrower characteristics. VA loans consistently prepay faster than FHA loans, particularly in higher coupon segments (5.5 percent and above), where the VA streamline refinance program plays a significant role. For lower coupon loans (5.0 percent and below), the difference is less pronounced, with VA loans averaging 2.6 CPR faster than FHA loans. In the higher coupon segment, the disparity grows significantly, with VA loans averaging 32.5 CPR. However, loans in this category make up just 22.6 percent of the outstanding Ginnie Mae II 30-year pool.

Servicer performance also impacts prepayment speeds. PennyMac frequently ranks among the fastest VA loan servicers, while United Shore and Navy Federal often rank among the slowest. In FHA loans, Rocket Mortgage consistently leads in faster prepayments, followed by CrossCountry and loanDepot, with United Shore and PHH trailing. Among loans with a maximum weighted average loan age of 36 months, NewRez leads in VA prepayments, whereas Navy Federal and United Shore are slower. On the FHA side, fast servicers include CrossCountry, Rocket, and Sun West, while US Bank and PHH remain slower.

This week includes updates on Housing Starts and Building Permits, Existing Home Sales, manufacturing PMIs, and Consumer Sentiment. Today’s economic calendar kicks off later this morning with the November NAHB Housing Market Index. We begin the week with Agency MBS prices slightly worse than Friday’s close, the 2-year yielding 4.31, and the 10-year yielding 4.47 after closing last week at 4.43 percent.

I know it's time to clean out my purse when my car assumes it's an extra passenger who isn't wearing a seat belt. (Thank you to Samantha S. for this one.)