8.9.22 Industry Cutbacks; Simple Nexus CEO Ben Miller on the Future of Mortgage Technology and Innovation; Latest Inflation Reading

Thanks to today's podcast sponsor, SimpleNexus, the homeownership platform that unites the people, systems, and stages of the mortgage process into one seamless, end-to-end solution that spans engagement, origination, closing, and business intelligence. To learn more about SimpleNexus, an nCino company, visit simplenexus.com.

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Singer/actress Olivia Newton John AND author David McCullough, both dying to start the week? (I just finished “Mornings on Horseback.”) After I die, I want my remains to be spread over Disneyland in Southern California. But I don’t want to be cremated. (Think about it.) Brokers know that also involving Southern California is today’s loanDepot earnings call at 2PM PT. “LD” has made some very public pronouncements of cutbacks in recent months… Will today continue that streak? Stay tuned. One can only imagine. Follow the money… how ‘bout the budget reconciliation bill that include $80 billion for the IRS for audits and enforcement, among other things?! Capital markets staff certainly focus on money, and the current STRATMOR blog is titled, “Capital Markets: Protecting Margins and Assets.” Does your company offer a 2nd mortgage behind someone else’s 1st? Interesting… Independent mortgage banks (IMBs) are mostly brokering out HELOCs, or referring out piggyback 2nds. Standalone HELOCs are not overly profitable. (Available here, this week’s podcast is sponsored by SimpleNexus, an nCino company and award-winning developer of mobile-first technology for the modern mortgage lender. Today’s has an interview with Simple Nexus CEO Ben Miller on the future of mortgage technology and industry innovation!)

Lender and broker services, programs, & software

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As trends from the late 1990’s and early 2000’s make a comeback, we are unfortunately being forced to relive the trauma of fuzzy bucket hats, velour tracksuits and low-rise denim. Unlike these trends, which should’ve been left in the past, down payment assistance (DPA) has been on the rise since the early 90’s when policymakers began focusing on increasing homeownership among low-income and minority households. As a nationwide authority on DPA, Down Payment Resource issues its quarterly Homeownership Program Index (HPI) report to track changes and trends in U.S. homebuyer assistance. Notably, despite declining economic conditions, the Q2 2022 HPI report showed growth in homebuyer assistance programs for the third consecutive quarter. View the full report for a comprehensive breakdown of homebuyer assistance trends in Q2 2022.

AXIS’ Modern Valuation Group (MVG) has combined technology, expertise, and robust QC processes to develop exciting new products to meet the demand for desktop hybrid appraisal products, and Freddie Mac’s ACE+ PDR Solution. To learn more about AXIS and its Modern Valuation Group products, visit www.axis-amc.com or contact Axis at modernvaluationgroup@axis-amc.com. You can view AXIS’ full release here.

Introducing Maxwell’s Spanish-language loan app, a fully bilingual mortgage experience to help lenders serve today’s borrowers. Mortgage solutions provider Maxwell just unveiled its highly anticipated Spanish-language loan app, covered by publications from Inman and MPA to  Finledger and TechCrunch. Offering a fully translated experience from landing page to submission, Maxwell’s Spanish loan app seamlessly integrates to the LOS and accounts for URLA and MISMO 3.4 requirements. Unlike many point-of-sale systems, which rely on ad hoc translation or subtitles, the Spanish loan application available through Maxwell Point of Sale provides immersive bilingual functionality that retains cultural context. While borrowers complete their application in Spanish or English with the ability to easily toggle between the two, LOs can continue to work in English on the back end, and access favorite features such as QuickApply™ and FileFetch™, which deliver application submission rates upwards of 90 percent. Want to attract, convert, and engage native Spanish speakers? Click here to learn more about Maxwell’s new Spanish-language loan app, or schedule a call with the team now. 

“As your borrowers’ mortgage guru, we know your jam-packed schedule doesn’t leave much room for back-office work in today’s hyper-competitive market. That’s why we’ve trained our processing team at wemlo® to work efficiently towards the CTC while you focus on helping clients navigate the homebuying process. By partnering with wemlo’s processing pros, you can rest easy knowing your loans (and clients) are in highly skilled hands. To make sure we’re helping you deliver clients a VIP experience, wemlo proudly offers processing support in 48 states for more than a dozen loan products including Conventional, FHA, Jumbo, VA, and Non-QM. Connect with wemlo today and discover the benefits of third-party processing. NMLS ID 1853218”

When a natural disaster strikes, how do you know which properties in your pipeline or portfolio may actually be affected? FEMA declares the impacted region a “disaster area” using county boundary designations, but natural disasters do not always affect all properties within those boundaries. To help you reduce your financial exposure and provide better borrower support during a disaster, Black Knight offers Disaster Alerts. This innovative solution leverages multiple sources to pinpoint the specific impacted properties. The alerts enable you to focus only on those properties in the impact zone, helping minimize on-the-ground property inspections and save time and money. And, since the data is updated in near-real-time as the disaster unfolds, the solution helps you make the most informed decisions about how to best proceed with loans in your pipeline. To learn more, download our complimentary whitepaper Natural Disasters and the Impact on the Mortgage Industry.

Spring EQ Wholesale is on a roll as it’s the ONLY wholesale lender in today’s market offering HELOCs, 30-year fixed rates, traditional broker compensation, (yes, you can earn fees) bridge loans, and AVMs. Add to that a team of experienced Account Executives and a cutting-edge technology platform, and you will see why Spring EQ is truly your one-stop home equity shop. You can see rates here. Spring EQ offers CLTVs to 95% and DTIs to 45% for Piggybacks, stand-alone 2nds, and 1st lien HELOCs. Rates have risen, and available equity is at record levels. Spring EQ’s product is something that all mortgage originators should have in their toolbox to keep their clients close and effectively compete to win more business. Become a partner now or contact your Account Executive to learn more.

When a life-altering event occurs (and, no, I’m not referring to the heartbreaking discontinuation of Klondike’s Choco Taco), consumers often rethink their financial goals as they adapt to their new situation. When a past borrower or a prospect gets married, has a child, or experiences a death in the family, Sales Boomerang and Mortgage Coach’s industry-first borrower retention and conversion platform can help lenders be the loyal financial advisor their consumers need with its latest loan opportunity alert product: Life Event Alerts. Tomorrow at 1 pm ET, join Sales Boomerang and Mortgage Coach’s Alex Kutsishin, Dave Savage, and Mike Spotten with Watson Mortgage Corp’s Michael DiClemente to learn more about this sweet new borrower intelligence offering. 

“Admit it... when you were a kid, you never dreamt of working in someone else’s office. Nope. You fantasized about freedom. You imagined the power of defining your destiny. When you open a Motto Mortgage franchise, your childhood dreams can become your adult reality. You’ll have YOUR own office, YOUR own team, YOUR own culture, YOUR own assets. You’ll be building YOUR own legacy. Even better? When you become part of the Motto network, you'll get comprehensive tools, technology and support through our exclusive Mortgage Brokerage-in-a-BoxSM business model. Email us today for all the details. Past YOU will be so proud.”

From its years as an originator, TMS continually draw on direct experience to shape who it is as a subservicer. TMS commits to provide the best-in-class customer experience because it has had first-hand experience of what sub-par servicing does to your business and your brand. As a result, TMS has continually raised the bar with continuous investment in its high talent and customer focused team of CAREologists. This has resulted in a 91% first-call resolution rate, 98% customer satisfaction score, 83% Net Present Score, and less than 10 second call wait times. It’s this forward-thinking commitment to the customer experience that has made TMS one of the nation’s Top 10 Subservicers, who can and will improve your brand, and ultimately and your bottom line. Ready for a subservicer who goes above and beyond? Partner with TMS.

Delivering Customer Service That Outpaces Industry Benchmarks. At Cenlar, we are always striving to improve the homeowner experience. The results of our efforts are clear, with the kind of progress that is measurable. Our call center is consistently outpacing industry benchmarks. Our performance reflects both our investments in people and technology, and the strengthening of our commitment to “think like a homeowner.” We strive to anticipate homeowner needs and answer common questions through proactive communications, like our chat bots and web site. While it is important to us that we are among the best in our industry, it’s of even greater importance that we are always improving the service we deliver to our clients and their homeowners. Let’s discuss how Cenlar can meet the mortgage servicing needs of your organization. Call 1-888-SUBSERV (782-7378) or visit us.

Verus Mortgage Capital, the largest buyer and securitizer of non-QM, is working with lenders to successfully navigate the current environment. Rising rates, tighter credit and the recent closure of some investors have created a shift in the marketplace that some lenders view as challenging. However, for those who execute a smart non-QM strategy, it’s a huge opportunity – but one that requires collaboration with an investor-partner who has a solid reputation, deep expertise, and available liquidity. Open the door to more borrowers. Verus knows how to anticipate needs and create innovative, non-agency financing solutions that you can leverage to expand your business. Find out why now is the ideal time to enter the non-QM sector. Contact Jeff Schaefer, Executive Vice President – Correspondent Sales to set up a meeting and learn more.

Verifying a borrower’s identity, credit, employment, income, assets, and liabilities with manual processes is time-consuming and exposes lenders to fraudulent activity. As Gen Z and Millennial borrowers are strongly influenced by digital services when selecting their mortgage lender, it must be asked: Why are borrowers still emailing, faxing, and mailing documents to processors and underwriters for manual analysis and verification? Mortgage lenders who download our research paper can learn how investing in Real-time Mortgage Verification Services will empower borrowers and help them make smarter lending decisions. Lenders and originators looking for a personal finance app they can privately label to provide their consumers and compete with companies they think are working in another stratosphere should watch the FinLocker online demo.

Did you know if you order VOEs too early in the process it can increase your costs? Xactus can help ensure your workflows are efficient when ordering verifications. Its direct integrations with The Work Number®, a solution offered through Equifax Workforce Solutions and the largest collection of payroll records contributed directly by employers, and Experian Verify™, a resource that delivers employment and income verification data directly from trusted payroll sources in real time, give you access to millions of employer records. Plus, the workflow is fully customizable and can cascade from one database to the next if no match is found in the first source searched. And, if the employer isn’t found in one of the online databases, a manual verification can be performed. Xactus’ VOEs also support Day 1 Certainty® from Fannie Mae. To learn more, click here or send an email.

Capital markets

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Recession proponents point to the fact that the 2 year/10-year yield curve spread has inverted by the highest margin since the dot-com crash. The thinking here is that the job gains will give the Fed more room to tighten, especially as accelerated wages intensify a threat of more entrenched inflation. The central bank is also trying to restrict monetary policy without negative consequences for the consumer and economy, but the recent figures could complicate its efforts of engineering a more temperate employment environment.

Given Friday’s strong jobs data, it is true that jobs haven't slowed at all in response to Federal Reserve tightening. Some economists are saying that while the odds of a near-term recession are lower, the risk of a “hard landing” is rising. Meanwhile, plenty of lenders and LOs would like to see lower mortgage rates… but do they really want a recession to get there?

Yesterday the bond market rebounded to some extent after Friday’s shellacking from the strong U.S. payrolls report. As noted above, the strong headline employment figure and wage growth pushed Fed rate hike odds for a 75-basis point increase to about a ⅔ likelihood at the September FOMC meeting from about a ⅓ chance a week ago. Domestically, the NY Fed released its Survey of Consumer Expectations for July, which showed that one-year ahead inflation expectations decreased to 6.2 percent from 6.8 percent while three-year inflation expectations fell to 3.2 percent from 3.6 percent. The findings may ease the Fed’s concern about high prices getting baked into household behavior.

There were also geopolitical tensions that contributed to the rally: China’s announcing new military drills around Taiwan, as well as Russia’s shelling near a Ukrainian nuclear facility. The Russian aggression grinds on.

The week after a jobs report is usually a snoozer for the bond market, but that has changed due to inflation concerns and this week's 3-year, 10-year, and 30-yr auctions. The Consumer Price Index, Unit Productivity and Labor Costs, and Producer Price Index all come out over the next three days. Today’s calendar includes the start of the $98 billion Quarterly Refunding with an auction of $42 billion 3-year notes. We’ve already received the NFIB Small Business Activity Index for July: confidence edged up in July as fuel prices eased and job openings became marginally easier to fill, but inflation worries intensified; the index rose four-tenths of a point last month to 89.9, the first monthly increase since December. We’ve also had Q2 productivity (-4.6 percent following Q1’s -7.4) and unit labor costs were +10.8 percent. The Desk will purchase only up to $149 million in UMBS15 3.5 percent and 4.0 percent. We begin the day with Agency MBS are worse about .125 and the 10-year yielding 2.81 after closing yesterday at 2.77 percent.

(Thank you to Patti C. for this one.)

Me at 16: This radio station is playing my song.

Me at 21: This bar is playing my song.

Me now: This grocery store is playing my song.