Chrisman Commentary - Daily Mortgage News

9.7.22 Margin Calls; Rob Chrisman on Mortgage Latest; Rates Keep Rising

Thanks to Candor. With Candor’s Machine as an Underwriter, lenders modernize their manufacturing infrastructure making them immune to margin, capacity, and staffing challenges forever.

The mortgage industry has come a long way from March of 2020, when the Federal Reserve pledged to buy “unlimited” amounts of Treasuries and MBS to stabilize the credit markets. The Fed started to shrink its balance sheet earlier this summer, and at the start of this month ramped up to a reduction rate of $95 billion per month ($60 billion of Treasuries and $35 billion of MBS) with plans to end its purchases of MBS from early payoff proceeds next week. The Fed’s actions in March of 2020 helped stave off margin calls for many lenders, though several European countries are now providing billions of euros in margin call support to European energy companies that need at least $1.5 trillion to cover the cost of their exposure to soaring gas prices. Margin calls eat into companies’ capital, and mortgage companies need all the cash they can get in this higher interest rate environment that has shocked borrower demand and subdued sales. Time on the market for homes increased in August for the first time in 26 months and the post-Labor Day slowdown is expected to be a little more intense this year than the tight market of 2020 and 2021. Fortunately, tappable equity, the amount a homeowner can borrow against while keeping a 20 percent equity stake, hit its 10th consecutive quarterly record high in Q2 at $11.5 trillion. Bring on those cash out refinances! (Today’s podcast is available here and includes a discussion between Robbie and me on the types of emails I receive and the best parties from yesteryear in the mortgage industry. This week’s podcasts are sponsored by Candor. With Candor’s Machine as an Underwriter, lenders modernize their manufacturing infrastructure making them immune to margin, capacity, and staffing challenges forever.)

 

Employment

______________________________________

 

Looking to join a growing mortgage consultancy?  The Oakleaf Group has an immediate opening for a Senior Business Development Executive with experience delivering consultancy/professional services sales with an emphasis in financial services, risk management, real estate, or mortgage banking/financing. In this role, you will be responsible for identifying, creating, and closing opportunities for mortgage servicing and origination regulatory compliance and risk management projects. This role is 100% REMOTE however Eastern/Central time zones are preferred. Preferred candidates should have 5+ years of experience in sales/business development and a proven track record of generating professional services revenue and achieving sales targets or quotas. Candidates should also have an understanding of origination and servicing compliance, audit, and other regulatory requirements. To learn more and apply, visit the Business Development Executive job description, or email your resume to Cheri Johnson.


With over 30 years in the mortgage industry, SWBC Mortgage is committed to maintaining our legacy as a financially strong organization. When you become a part of the SWBC Mortgage family, rest assured that you are joining one of the strongest mortgage companies in the U.S. As a privately owned organization, we don’t face the same challenges that our competitors do in a fluctuating market. We stand behind our solid foundation and believe it will lead to an even stronger future. Join us and thrive in confidence. To learn more about our current opportunities, contact Scott Brown.


Evergreen Home Loans™ believes in supporting the spirit of giving in the markets they serve by improving lives through wellness and housing programs. “Compassion and giving are at the heart of Evergreen’s culture,” said Jessie Hibbard, vice president of Human Resources. “Through our Evergreen Cares Foundation, we support our associates in their efforts and willingness to give back in the communities they and Evergreen serve. This relationship gives us a larger sphere of influence to aid in transforming lives and make meaningful differences while aligning with our vision to change the world one relationship at a time.” As loan officers, you already positively impact people and communities. Continue to do so with a company that values your efforts to give back, celebrates individual growth, and truly lives its unique and award-winning culture. For more information, visit the Evergreen Careers page. 


E Mortgage Capital (EMC), one of the largest independent mortgage platforms in the county, has experienced tremendous growth in 2022 with over 200 new mortgage professionals choosing to join the organization. EMC has built a platform that allows Branch Managers and Loan Officers to increase their earning potential while providing industry leading technology and resources to create a world-class experience for consumers. EMC is actively hiring Branch Managers and Loan Officers across the country with comp plans up to 500 BPS. "We are invested in helping mortgage professionals find opportunities to grow their business and better serve their clients. As a leader, it is my job to ensure EMC branch managers and loan officers have the right resources and business planning strategies to thrive regardless of market conditions" says Joe Shalaby, CEO of E Mortgage Capital. If you are a licensed Mortgage Loan Originator looking to explore the E Mortgage Capital platform, please contact Joe Shalaby.

 

Vendor Tidbits

______________________________________

 

Going back to work after a fun-filled Labor Day weekend can be a rough transition. On the bright side, we can always count on caffeine to help grease the wheels! But it takes much more than an extra cup of coffee for credit union lenders to power a truly successful digital closing transformation. This Thursday, September 8 at 2:00 PM EST, learn eClose adoption and implementation best practices for credit unions by attending ACUMA’s Power Hour event. In this eye-opening webinar, industry-leading eClose provider SimpleNexus will join Altra Federal Credit Union to discuss tech adoption strategies and the partnerships required to strengthen these initiatives. Tune in and learn expert strategies for energizing credit union eClose transformations.

 

With home prices across the country still at or near record highs, many homebuyers could benefit from a little down payment assistance (DPA). The good news is that AFR Wholesale® administers a popular government-sponsored plan called DPA Advantage which offers a 2% or 3.5% grant on FHA purchases. It’s designed to help first-time home buyers as well as those who make a difference in the lives of others (like first responders). What’s more, DPA Advantage is a true grant, not a “silent second” mortgage meaning there’s no additional lien. DPA Advantage can also be combined with an FHA 203(k) renovation loan, allowing your clients to consider a wider range of homes! For information about becoming an AFR partner so you can offer DPA Advantage to your clients, visit here, email or call 1-800-375-6071.


Rock fans long ago realized that if you play a certain Pink Floyd song in reverse, you’ll hear a hidden message. Conversely, many homeowners aged 62 and older have yet to discover they can reverse their mortgage to convert their home equity into cash, a strategy that can extend retirees’ retirement savings and reduce their financial reliance on their adult children. Join Alex Kutsishin and Dave Savage from Sales Boomerang + Mortgage Coach, Wendy Peel and Suha Zehl from BlackFin Group and Tim Nguyen of BeSmartee tomorrow at 2 pm ET to learn more about the looming retirement crisis, responsible uses of home equity and digital strategies to provide personalized financial education to every generation of consumers. Registration includes an optional $10 donation, which will go directly to United Help Ukraine’s humanitarian programs. Register and become part of this growing force for good while learning something in the process!

 

Today more than 750 mortgage professionals are gathering in Dallas, Texas, for Supreme Lending’s Sales Rally 2022. Back after a forced three-year hiatus, Supreme’s Sales Rally provides attendees with an opportunity to invest in themselves, grow their networks, and be inspired. This year’s agenda dedicates two days to sharing proven strategies and best practices, listening to influential speakers in and out of the mortgage industry, and participating in breakout sessions to sharpen skills. “Sales Rally is super important for building morale and a sense of community,” said Supreme President Scott Everett. “Having events like this helps us prepare for and look toward the future, which is fundamental to ensuring our company’s long-term success. It’s more important than ever that our team leave Sales Rally feeling empowered, invigorated, and ready to lead to win." Contact National Production Manager Ryan Baxter to join a team that invests in you, in prosperous and challenging market conditions.


There are only 8,760 hours in a year, 2,920 of which are spent sleeping, and 2,080 of which are spent working. With a finite number of hours in a day, busy mortgage professionals need to manage their time wisely. Fortunately, Black Knight’s Surefire CRM cuts down on marketing man hours with its award-winning library of creative content and automated marketing tools that intelligently customize campaigns to recipients. What’s more, Surefire makes it easy to nurture referral partnerships and generate leads co-branded single property websites and flyers that can be generated in mere moments. Learn how single property sites and flyers by Surefire can help you reclaim valuable time in your workday. 

 

NEW EBOOK: 5 Essential Functions of High-Performing Point-of-Sale Technology. Technology is a vital tool to stay competitive across market cycles. Still, there’s a risk in the search for the right provider: If lenders aren’t careful, they can fall prey to pricey subscriptions for complex services that their LOs never adopt and that integrate clumsily with their systems and processes. Mortgage solutions provider Maxwell created its latest eBook to simplify your point-of-sale technology search. In this eBook, you’ll learn the 5 non-negotiable boxes your point of sale should check, market considerations to guide your feature wishlist, and real-life examples of how lenders have leveraged point-of-sale solutions for measurable impact. By the end of this read, you and your team will have a clear picture of the standard to set for a high-performing point-of-sale solution. Ready to go beyond marketing promises to choose technology that addresses today’s most pressing challenges? Click here to download 5 Essential Functions of High-Performing Point-of-Sale Technology. 

 

Boost Your Pipeline with September Specials! 25 BPS OFF Government (below 680 FICO) and Conventional High Balance! For a limited time only from 9/1/2022 for all loans locked through 9/30/22. Includes, Purchase, Cash-Out and Refinance programs. Contact your LoanStream Account Executive to learn more or click here now! Interested in getting approved so that we can make YOU the ONE to call? Click here.

 

Investor News

______________________________________


Effective on new locks, PennyMac has lowered 15-day and 30-day relock commitment fees. have been lowered. Details available in PennyMac Announcement 22-50: Relock Commitment Fees.


In an effort to reduce digital footprint and maintain the highest level of portal speed, Pennymac issued a request that non-essential documents be eliminated from the uploaded seller credit packages effective immediately. A prime example is the CFPB Home Loan Toolkit.

 

FHA published Mortgagee Letter (ML) 2022-14, Unique Entity Identifier for FHA-Approved Lenders, Mortgagees, and Institutions Seeking FHA Approval. This ML establishes the requirement announced by the General Services Administration (GSA) that entities engaged in or seeking to do business with the federal government have an active Unique Entity Identifier (UEI) from GSA’s System of Award Management (SAM.gov). The UEI is an alpha-numeric identifier used by the federal government to maintain consistent name and address data about non-federal entities doing business with the government.


AmeriHome Correspondent published information on FHA changes with ML 2022-09 and FHA INFO #22-68 addressing multiple topics. See AmeriHome Product Announcement 20220812-CL– FHA Info 22-68 & ML 2022-09 Updates for details.

 

Do you DSCR? Twenty states and Washington DC allow you to originate DSCR loans without being licensed in that state. With Carrington Correspondent, new opportunities await.


In Wells Fargo Newsflash C22-020nc, information on its expansion of policy for Non-Conforming Loans secured against condominium (condo) properties in Miami-Dade County, Florida. As a result of the enhancements, Wells Fargo removed the entire Florida LTV/CLTV requirements. Another item of interest is the updated Wells Fargo Funding Seller Guide (Seller Guide) Section 505.04: Standard Closing Documentation to reflect minimum documentation requirements for a Non-Conforming Loan to be considered delivered (received).

 

Wells Fargo Funding has expanded flood insurance replacement cost value requirements for all Loan types, details are shown in Wells Fargo Newsflash C22-035. Also included in the Newsflash is information on expansion of citizenship requirements for conventional Conforming and Non-Conforming Loans, Resale-deed restrictions on Conventional Conforming Loans, effective September 19, 2022, condominium (condo) requirements update for delegated Conforming loans to ensure clear and concise guidelines, there are no changes to policy.

 

PRMG Product Update 22-43 includes information regarding allowance of age restricted properties on Conventional products. Agency Freddie Mac clarification on delayed financing considered a cash out transaction requiring all cash out requirements. CPA Prepared P&L option is only eligible for self-employed borrowers using one business to qualify for Expanded Access.

 

AmeriHome Correspondent posted General Announcement 20220813-CL summarizing previously published changes made during August. Also, there are additional changes and recent Agency and regulatory news made with this announcement.


FHA posted Mortgagee Letter (ML) 2022-15, Update to Home Equity Conversion Mortgage (HECM) Program Requirements for Notice of Due and Payable Status. The guidance in this ML requires mortgagees to notify the borrower’s estate, heirs, or other party with legal title to the property that the HECM has become due and payable within 30 days of notifying the Secretary of the last surviving borrower’s death.

 

Capital Markets

______________________________________


Bond yields soared (read: mortgage rates rose) to open the trading week on the views the Federal Reserve will stay hawkish with aggressive rate hikes as it seeks to tamp down inflation. There was also some chatter of the Fed potentially stepping up its balance sheet reduction efforts this month. Data on the day yesterday included a stronger-than-expected ISM Non-Manufacturing Index for August, which increased from July to mark the 27th straight month of growth for the services sector. Business activity for the non-manufacturing sector accelerated slightly at the same time there was a deceleration in the pace of price increases.

 

That follows reports last week that consumer confidence rose in August as present and future concerns about inflation have eased from recent elevated levels. The ISM manufacturing Index last week held steady at 52.8 percent in August, however new orders from overseas fell into contraction territory as the strong U.S. dollar and weakening global economies are taking their toll. Prices in the manufacturing sector have declined to the lowest levels in two years. Residential construction fell 1.5 percent in July and single-family construction declined 4 percent. While there are pockets of cooling in the economic data, it may not yet be enough for the Fed to change its course regarding interest rates following this month’s FOMC meeting.  

 

Weekly mortgage applications from the MBA led off today’s calendar, decreasing 0.8 percent from one week earlier for the week ending September 2, 2022. Activity was expected to remain near the recent lows with 30-year mortgage rates during the reporting period rising to above 6.0 percent, according to Bankrate and Mortgage News Daily. We’ve also received the July trade deficit (-$90.19 billion). Expectations were for -$70.0 billion versus -$79.6 billion previously. Later this morning brings Redbook same store sales, remarks from multiple Fed speakers (Richmond’s Barkin, Cleveland’s Mester. Vice Chair Brainard, and Vice Chair of Supervision Barr), and the Fed will release the latest Beige Book this afternoon ahead of the September 20/21 FOMC meeting. Today’s MBS purchase schedule sees the Desk in UMBS15s for up to $122 million 4 percent and 4.5 percent. Also, the agencies will begin releasing August prepayments this afternoon. We begin the day with Agency MBS prices better by 1/8th and the 10-year yielding 3.31 after closing yesterday at 3.33 percent.


My wife said, “You really have no sense of direction, do you?” I replied, “Where did that come from?”