2.10.25 CFPB RIP; Lender Price's Dawar Alimi on Innovation; Quarterly Refunding Movement

Client retention has always been an issue in our industry – less than 20% of all consumers use the same broker or loan officer on a second home purchase, HELOC or refinance. But CoreLogic is giving mortgage professionals the tools they need to establish long-term relationships with their clients, helping them keep future business in-house. That’s why users of their Marketing and Retention Solutions, delivered on the revolutionary Araya platform, say it’s transformed the way they do business. Check it out for yourself, visit corelogic.com/chrisman today to learn more or schedule a free demo.

Transcript

Can you imagine living in an uninhabited land? I’m thinking of hopping on a boat and checking out the Kingdom of Redonda which has a great climate and doesn’t have taxes, banks, politics, regulations, or… infrastructure. Oh well. The United States, though, has plenty going on. Anyone believing campaign statements (on either side) that the U.S. economy was in terrible shape continues to see otherwise. The latest example was the jobs data Friday, leading investors, and the Federal Reserve, to see that the U.S. jobs market is healthy, and there is no need for a Fed rate cut in the immediate future. On the regulatory and compliance front, and there is more below, President Trump’s Russell Vought, the newly installed director of the Office of Management and Budget, directed the CFPB, over the weekend, to stop work on proposed rules, to suspend the effective dates on any rules that were finalized but not yet effective, and to stop investigative work and not begin any new investigations. (Today’s podcast can be found here and this week’s is sponsored by CoreLogic. Originators who leverage their Marketing Solutions as part of their customer retention practices have seen their pipelines increase by up to 4 times when compared to traditional lead generation methods. Hear an interview with Lender Price’s Dawar Alimi on how tech companies should onboard to maximize the benefit for their clients and how Lender Price stays on the cutting edge of technology.)

Jobs & transitions

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Synergy One Lending Launches Builder Division! The new division expands opportunities for loan officers, homebuilders, and homebuyers. Synergy One Lending is expanding its product suite with the launch of its Builder Division, starting with a 2x Close Construction Loan. This initiative diversifies revenue streams, strengthens builder partnerships, and creates new business opportunities for loan officers. “Our construction loan product is just the beginning,” said Steve Majerus, CEO of Synergy One Lending. “By introducing new products and flexible financing solutions, we will help builders grow their businesses, empower buyers to overcome affordability hurdles, and create new reach and opportunities for our loan officers.” The Builder Division will also introduce builder-direct tools and financing solutions in early Q2, further supporting homebuilders, homebuyers, and loan officers. For more information, please visit S1L.com. Contact: Lindsey Ricciardelli.

Since the successful launch of Foundation Mortgage’s Correspondent channel, both Full and Non-Delegated, Foundation has expanded its reach to offer NonQM products to mortgage bankers nationwide, offering more flexible loan products for borrowers. Foundation Mortgage has integrated the same reliability, consistency, versatility and competitive advantages that it offers through the Wholesale channel, making Foundation one of the fastest growing nationwide NonQM lenders. If you are interested to learn how you can build your lender platform on a solid Foundation and capture more origination opportunities and increase your bottom line, please contact Matt Brammer for Eastern U.S. or Boris Firquain, for Western U.S.

(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 services, products, and software

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Refinancing isn’t an option for most homeowners with low mortgage rates, but their equity is still accessible… fast. HomeEQ, a division of Arc Home, is a fully digital HELOC solution designed to close in as little as 5-10 days. Brokers can now offer a streamlined, borrower-friendly way to leverage home equity for debt consolidation, home improvements, and major milestones, all without affecting a client’s first mortgage. With competitive pricing, 2% broker compensation, and full marketing support, HomeEQ makes it easy to expand your business. Contact John Gibson or watch our demo video to learn more and become part of our growing network of broker partners today.

The Cost of "Free": Why Paid Mortgage POS Tech Pays Off! Using a “free” mortgage POS to drive down costs during today’s downcycle? Here’s the catch: Free tech isn’t really free. As competition in the mortgage industry heats up, the true cost of free solutions becomes clear. For instance, did you know Maxwell POS customers drive an average of $22 million more in loan volume per year compared to free alternatives? In this must-read eBook, Maxwell reveals how “free” tech can lead to hidden costs, missed opportunities, and lower returns. Find out why investing in a paid POS system boosts efficiency, borrower satisfaction, and loan officer productivity. Click here to get your copy of The Cost of Free and discover the data-driven case for paid mortgage POS technology.

In 2024, IMBs discovered how to turn their accounts payable from a cost center to a profit center. Western Alliance Bank can teach you how. Its Specialized Mortgage Services Group offers cash management solutions that independent mortgage bankers can rely on. One solution is their commercial credit card program that can simplify your business by automating travel and expense reporting and Accounts Payable spending. Thanks to quick reconciliation and robust reporting, you gain more than time savings… You can also gain revenue share. Want to create a conversation piece? Customize your card with your name and logo. With Western Alliance Bank’s commercial card and specialized Treasury Management tools tailored to the needs of IMBs, you can optimize efficiency, which helps drive profitability. Reach out to the responsive team to find out what they can do for you. Western Alliance Bank, Member FDIC.

“Looking to help your clients navigate complex home-buying scenarios while growing your pipeline? American Heritage Lending offers two flexible Bridge Star loan programs for primary residences, allowing homeowners to leverage the equity in their departing, listed home to fund a down payment on their new dream home. Choose from a standalone loan or a two-loan solution for purchases involving another property. Join our Originate MORE! webinar series on February 19 at 1:00 PM EST. This informative session will dive into Bridge Star loan options, providing key insights on how these programs can give your business a competitive edge. Reserve your spot today and discover how AHL's tailored solutions can help you close more deals in 2024! For more information, contact Jamie Gueltzow, EVP – Third Party Originations Register here: Registration.”

Quoting fees within permitted tolerances can be extremely time-consuming and costly for lenders, requiring continuous monitoring, staff training, and robust processes in place to protect against fee cures. Properly understanding the complexity of TRID fee cures by leveraging the right technology can help save lenders from fee tolerance violations and help streamline the home-buying experience. Read ICE’s latest blog post, Understanding TRID Fee Cures, by Richard Lombardi, Executive Vice President of Property Data Solutions & Data Strategy at ICE Mortgage Technology, to learn the common challenges lenders face in handling hidden fees, where fee cures come into play and how to prevent them, and ways to support TRID compliance with the right tools in place.

Consumer Finance Protection in flux

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“Pursuant to the Consumer Financial Protection Act, I have notified the Federal Reserve that CFPB will not be taking its next draw of unappropriated funding because it is not "reasonably necessary" to carry out its duties. The Bureau's current balance of $711.6 million is in fact excessive in the current fiscal environment. This spigot, long contributing to CFPB's unaccountability, is now being turned off.” So wrote Russ Vought wrote the Federal Reserve on his first day “leading” the CFPB to indicate that the consumer protection bureau would not take any unappropriated funding for the fiscal quarter starting in April.

Tesla CEO and Trump adviser Elon Musk on Friday posted “CFPB RIP” on X, the social media platform he owns. Over the next day, the CFPB would have a new acting director, its X profile would be deleted, and anyone who tried logging on to its webpage would see a “404 error” text and an illustration of an unplugged socket.

In my email’s in-box reaction was, as you might imagine swift, and ran the gamut from, “This is the best thing ever for lenders everywhere!” through, “Measured steps would have made so much more sense” to “Name an industry that polices itself well… we’re going back to stated income, stated asset loans and offenders running rampant.”

In a more measured tone, a well-known industry vet wrote to me saying, “I fear the plan is to put the CFPB in a near “coma” with essential activities only. If we remove all supervision, have no guidance, and no changes, even to streamline existing regulations, that will be a serious error. As it stands now, CFPB personnel can't even respond to HMDA help inquiries during this filing season, with 5,000 lenders fulfilling their statutory requirements, and CFPB personnel are uncertain if and when they can release the data which industry and others use for benchmarking and compliance.

“It's early, and too soon to say where things land, but entirely ceasing operations is probably not the right way to reform the Bureau (which is clearly needed).” 

Good luck with your HMDA reporting questions.

Is the borrower engine tiring?

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Our Mortgage Bankers Association reported that, “The delinquency rate for mortgage loans on one-to-four-unit residential properties increased to a seasonally adjusted rate of 3.98 percent of all loans outstanding at the end of the fourth quarter of 2024.

In its National Delinquency Survey, “The delinquency rate was up 6 basis points from the third quarter of 2024 and up 10 basis points from one year ago. The percentage of loans on which foreclosure actions were started in the fourth quarter rose by 1 basis point to 0.15 percent.

“Although mortgage delinquencies rose only ten basis points in the fourth quarter of 2024 compared to one year ago, the composition of the delinquencies changed,” said Marina Walsh, CMB, MBA’s Vice President of Industry Analysis. “Conventional delinquencies remain near historical lows, but FHA and VA delinquencies are increasing at a faster pace. By the end of the fourth quarter, the spread between the FHA and conventional delinquency rates reached 841 basis points, while the VA and conventional spread was 208 basis points.”

“Government loans are also rolling to later stages of delinquency. Compared to one year ago, the seriously delinquent rate rose seventy basis points for FHA loans and fifty-seven basis points for VA loans, but only two basis points for conventional loans.”

According to Walsh, while the labor market remains relatively strong and often tracks with mortgage performance, some of today’s headwinds include inflationary pressures, lower personal savings rates, natural disasters, increasing consumer debt, higher tax and insurance payments, and higher debt-to-income ratios. All of these factors may be impacting government borrowers to a greater extent than conventional borrowers.

Capital markets: no more pennies?

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There are 100 billion pennies in a billion dollars, the same as 200 million nickels. What’s a few billion among friends? Mortgage pricing, rates, and servicing values depend a great deal on supply and demand. Bank of America Corp. has agreed to buy a $9 billion portfolio of residential jumbo, high credit score mortgage loans from Toronto-Dominion Bank, as the Canadian lender looks to shed certain holdings to meet a new regulatory cap on its assets, according to people with knowledge of the matter.

Whether you approve of Trump’s motives or not, few dispute that the new tariffs (additional taxes imposed on foreign importers) could be passed on to consumers, raising prices that are already high. Things like cars, food, gasoline, and building materials could all get more expensive, depending on how things play out.

The tariffs were set to start Feb. 4, but only the 10% tariff on Chinese imports has actually taken effect. Leaders in Mexico and Canada have managed to get a 30-day reprieve from the 25% tariffs imposed on their countries by pledging to prioritize Trump’s border control concerns. That said, Trump has announced that today he will put in place tariffs on steel and aluminum.

Last week began with attention on the potential implementation of tariffs on Canada and Mexico, but tensions eased after both countries agreed to border security concessions, leading to a 30-day delay. If these tariffs ultimately take effect, they could contribute to stagflation, slower economic growth paired with rising prices. On the data front, January’s jobs report showed 143,000 new jobs added, falling short of expectations. Annual revisions from the Bureau of Labor Statistics revealed that job growth over the summer was weaker than initially reported, averaging just 82,000 jobs per month from June through August compared to the previously estimated 113,000.

Meanwhile, the ISM Manufacturing Index climbed above 50 for the first time since 2022, signaling a potential recovery in a sector that has been particularly sensitive to high interest rates. Construction spending also ended 2024 on a strong note, rising 0.5 percent, with gains in single-family home construction and home improvement offsetting weakness in office, warehouse, and retail development. The unemployment rate ticked down to 4.1 percent, largely due to statistical adjustments from the BLS's annual population survey revision, which increased the reported number of employed people by 2.2 million. However, these adjustments add noise to the data, making it more difficult to assess the true state of the labor market.

Although none of this happens today, this week is packed with market-moving potential, including the Quarterly Refunding consisting of $125 billion in 3-year, 10-year, and 30-year maturities to be auctioned over Tuesday to Thursday. Fed Chair Powell will deliver his Semiannual Monetary Policy Report to Congress before the Senate Banking Committee and House Financial Services Committee on Tuesday and Wednesday. Key data includes CPI (Wednesday), PPI (Thursday) and retail sales, import prices, industrial production and capacity utilization on Friday ahead of the long weekend. Regarding MBS, Class A and B 48-hours notifications are on Tuesday and Thursday. The week gets off to a quiet start later this morning with the Employment Trends Index for January. We begin this 5-day workweek with Agency MBS prices unchanged from Friday’s close and the 10-year yielding 4.49 after closing last week at 4.49 percent.

As Valentine’s Day approached, and after 35 years of marriage, a husband and wife came for counseling. When asked what the problem was, the wife went into a tirade listing every problem they had ever had in the years they had been married. On and on and on: neglect, lack of intimacy, emptiness, loneliness, feeling unloved and unlovable, an entire laundry list of unmet needs she had endured.
Finally, after allowing this for a sufficient length of time, the therapist got up, walked around the desk and after asking the wife to stand, he embraced and kissed her long and passionately as her husband watched, with a raised eyebrow. The woman shut up and quietly sat down as though in a daze.
The therapist turned to the husband and said, "This is what your wife needs at least 3 times a week. Can you do this?"
"Well, I can drop her off here on Mondays and Wednesdays, but on Fridays, I golf."

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. This month’s piece is titled, “Natural Disasters and Economic Resilience.” The Commentary’s podcast is live and at any place you obtain your podcasts (like Apple or Spotify).

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