11.8.22 Climate Change MBS Pricing; The Money Source's Shayna Arrington on Compliance; Election Day

Today's podcast is brought to you by SimpleNexus, an nCino company and award-winning developer of mobile-first technology for the modern mortgage lender.

Nexus Origination is SimpleNexus' award-winning point-of-sale product enabling borrowers and lenders to manage the homeownership journey from anywhere. The solution includes features that enhance real estate agent referral strategies and offers robust mobile origination functionality.

Learn more at simplenexus.com.

Transcript

Copy Transcript Copied

This morning I head from Chicago to Atlanta, with a corresponding change in temperatures (20 degrees) and snow readiness (even the Chicago garbage trucks can be outfitted with plows; an inch of snow in Atlanta can paralyze the city for a day). “Don’t knock the weather. If it didn’t change once in a while, nine tenths of the people couldn’t start a conversation.” Whether or not an individual believes in manmade, or natural, climate change, is immaterial. If investors in mortgage-backed securities, or insurance companies, do, and it impacts borrower pricing, or your ability to obtain insurance in places like Florida or California, then it matters. U.N. climate talks in Egypt, known as COP27, are underway this week, with many of the parties looking for concrete pledges to combat the damaging effects of climate change. "Moving from negotiations and pledges to an era of implementation is a priority," said COP27 President Sameh Shoukry. Good luck. Despite coral making a great comeback in the Pacific, greenhouse gases like carbon dioxide, methane and nitrous oxide reached new record highs in 2021, while increasing temperatures, a loss of biodiversity, and extreme weather events like floods and hurricanes are said to be growing in intensity. (Today’s podcast is available here and this week’s is sponsored by SimpleNexus, an nCino company and award-winning developer of mobile-first technology for the modern mortgage lender. Listen to an interview with TMS Chief Compliance Officer Shayna Arrington on compliance hot topics and why compliance matters to customers.)

Employment, a transition, and untimely deaths

___________________________________________________

It’s easy to be successful with any company in favorable markets, but when market conditions turn, finding a stable company that is set up for long-term success is vital to your business. New American Funding has weathered all markets for nearly 20 years and is prepared to help you find success in the current mortgage climate. That’s why more than 300 talented Loan Officers have joined New American Funding this year alone! With innovate programs like its Five-Year Rate Protection Pledge and its new Interest Rate Buydown program, New American Funding is committed to giving you the tools you need to successfully navigate the current market conditions. If you’re looking for a company that can support your growth by providing stability through all economic conditions, New American Funding is the company for you! For more information, contact Jordyn Dexter today! 800-450-2010 x7651. EOE 

“Earning less income in 2022? We have a solution that you do not want to miss out on!! Prime Choice is looking for experienced loan officers and/or other industry sales members to join our team as Solar Specialists. Whether as an employee or an independent dealer, the Prime Choice team will be with you every step of the way!! Add more value to homeowners across the country and join the solar evolution today. Since 2007, Prime Choice has been dedicated to serving homeowners. We help homeowners make the switch to solar, whether they want to save money on energy or reduce their carbon footprint. We're here to provide a better solar experience for our customers, assisting them in connecting to cleaner, more affordable energy. competitive pay and benefits. Sign-up bonuses are available. It's time to step up to the big leagues. To get started, go here.”

Ross Mortgage Company is committed to giving our loan officers every possible chance to succeed in today’s market. We have worked to forge local relationships to give our LOs access to extremely competitive ARM rates. These rates combined with access to a robust affinity partnership network has allowed Ross Mortgage Company loan officers to stay productive. If you are a loan officer frustrated with your current rates, lack of inbound leads, or promises that have fallen flat as the market shifted reach out to VP of Sales, Kevin Coleman for a confidential conversation. 

A growth-oriented CFO, impacted by the recent closure of a lender, is available on short notice. Has worked in conventional/conforming markets and non-QM in the distributed retail and wholesale channels with private and public lenders, as well as with PE investors. 15+ years’ experience in start-up, high growth middle market companies and public companies. Comfortable working at both a strategic level and a hands-on operational level. Also open to work on M&A transactions or restructurings. Preferred location is on the West Coast but would be willing to relocate in the U.S. for the right opportunity. Send me your note of interest so that I can forward to the candidate.

Freddie Mac announced that Ravi Shankar has joined the company as senior vice president and head of Single-Family Portfolio and Servicing. “Mr. Shankar brings over three decades of experience managing multibillion-dollar finance, capital markets, portfolios, and mortgage trading operations.”

Delmar Mortgage is happy to announce the addition of Victoria DeLuce as the SVP of Business Development with her robust Capital Markets background in addition to running lending divisions such Direct to Consumer and Wholesale. Victoria is passionate about sharing her market knowledge with originators to help them become the interest rate expert for their clients and referral partners. Todd Solomon, EVP, and owner partner of Delmar Mortgage say, “Vic is perfect for this role because she doesn’t just talk the talk, she can walk the walk.” Delmar mortgage, headquartered in St. Louis, MO, was founded in 1966 and has spent almost 60 years establishing a value proposition to give originators all the tools to be successful in any market cycle.

The industry is very sorry to hear the news out of Guild Mortgage about the passing of Lisa Klika, age 45, SVP and Chief Compliance Officer, this weekend. She was respected around the industry, and will certainly be missed in the Guild family. An avid golfer, she died unexpectedly doing the thing she loved but leaving a loving family.

And from the Fairway Independent family came news that one of their loan officer teammates’ life was tragically cut short in an auto accident. Lori Medeiros, 54, will be missed by her family and company.

Lender and broker services and products

___________________________________________________

Steep interest rate hikes have propelled consumer interest in down payment assistance (DPA), with Down Payment Resource reporting that homebuyer queries about DPA now exceed 10,000 a day. The market is chomping at the bit for homeownership affordability solutions, and wise lenders are making the pivot to cater to market demand. Down Payment Resource has a suite of tools designed to help lenders increase their purchase business with DPA and easily manage these must-have programs. Using DPA Directory to curate programs that meet borrower needs and investor requirements has enabled Cherry Creek Mortgage to expand affordability offerings while reducing the time it spends on product management. In fact, the lender has tripled affordability program offerings with less staff support. Download the free case study to see how Cherry Creek is meeting market demand with Down Payment Resource.

“I’m late! I’m late! For a very important date!” Any notary who’s sat in rush hour traffic can relate to the White Rabbit of Wonderland. There’s nothing more frustrating than hurrying to get important mortgage documents signed only to be held hostage to the whims of gridlock. Enter DocVerify. This remote online notarization platform is an industry-decorated e-Signature powerhouse that gets rid of those “white rabbit” moments and leaves you and your customers smiling like the Cheshire Cat. With DocVerify, you can securely sign, store and manage legally binding documents in just seconds from anywhere. The entire process is done in the cloud, eliminating paper, hassles, time in the car, and saving a huge chunk of your gas budget. So, leave the car keys where they are. Speak to a DocVerify team member today, and see how you can start e-signing from anywhere.

Aaron Sorkin, one of the great modern screenwriters and the man behind “The West Wing” and “A Few Good Men,” writes with such precision that actors cannot deviate from the script without changing the scene. Fortunately, Sorkin did not write the Sales Boomerang and Mortgage Coach scripts that help mortgage advisors use to educate, convert and retain homebuyers. These scripts provide the framework for a successful borrower interaction, but leave room for you to improvise based on each borrower’s unique situation. With these scripts in hand, your borrowers CAN handle the truth as you present the right loan opportunity at the right time. Download these free loan conversion scripts and start learning your lines today.

Numbers don’t lie, and TMS Subservicing puts up some pretty impressive numbers. As one of the nation’s Top 10 Subservicers, TMS boasts a 99% Customer Satisfaction Rate, a 91% First-Call Resolution Rate, and an 83% Net Promoter Score. What’s more, customers wait on average less than 60 seconds to reach their team members. And when they do speak to their customer care team, they’re getting a class leading and caring experience from someone who receives 220+ hours of annual training. TMS’ core mission is to Grow Happiness and they do so by making heavy investments in the customer experience… You might say they’re obsessed with it. As a result, customers don’t have to wait long, and their questions and concerns are solved on the first call. Ready to put an end to sub-par servicing? Learn more about TMS Subservicing here.

“At Xactus, the leading verification innovator for the mortgage industry, we’re diligently working with our customers – sharing insights about the housing industry and discussing concerns. Costs are rising everywhere, and our industry isn’t immune. The repositories increase costs annually and this year they’ll be steeper than normal. FICO has also announced a historic price increase. Now it’s especially critical for lenders to work with the right verifications partner – one who can help create efficiencies and improve workflows with innovative technology and superior customer service. Learn how Xactus can help you succeed in today’s rapidly changing environment. Email us.”

Clear to Close Podcast: The Biggest News, Ideas & Takeaways from MBA Annual 2022. As the dust settles from the MBA Annual conference in Nashville, the industry is still abuzz with market predictions, industry announcements, and new concepts that came out of the event. In this episode of Clear to Close from mortgage solutions provider Maxwell, hosts Alan, Bryan, and Anthony unpack the most important takeaways from MBA Annual, including current lender sentiment, breaking news that will impact lenders in 2023, and more. Want to learn reactions to MBA Chief Economist Mike Fratantoni’s latest forecast, how the shift to FICO 10T and VantageScore 4.0 credit scoring models will impact lenders, and other important insights from Music City? Listen to the Clear to Close podcast’s new episode on Apple Podcasts, Spotify, Google Podcasts, or your browser.

Trigger leads? Just say no

___________________________________________________

“Rob, I've been in the mortgage industry a long time. What needs changing is the ability to sell MCR (mortgage credit report) data to other mortgage companies. I work with clients often times for long periods of times but warn all of them about the pending bombardment of other lenders who might try to contact them because we pulled an MCR. Why isn't this a violation of their privacy...along the lines of HIPPA, for example? Some believe that someone's pockets are getting lined.”

Tracey King with Partners Credit and Verification responded with, “This is a huge issue and I couldn’t agree more. Especially now, it seems like borderline harassment with borrowers. Unfortunately, there is little we can do about it. Federal law allows it; here is a document from the FTC we send out to some of our customers to give a little color to how or why this is happening. 

“There is little to do to prevent it, but there are a couple of options. First, if you work with real estate agents, I suggest that from the onset, you suggest to the borrower to “Opt out” of these offers prior to their credit being run. Make sure to do this as early on as possible as it takes a few days to take effect. They can call 1-888-5-OPTOUT or go to www.optoutprescreen.com. 

“The other option is when you first pull a credit report, you can run a PreQual (soft pull) with 1, 2, or 3 bureaus to see if the borrower qualifies. Because it is a soft pull, it will not set off the trigger and notify competitors. However, you are unable to reissue this report and would have to ultimately pull credit, which will then start the trigger process but hopefully after your relationship has been established. I do believe the best approach here, especially if you have a relationship with realtors, is to go the Opt-Out route. The borrowers can also see this as an added benefit of working with you and not being solicited by dozens of lenders.”

Capital markets: Election Day

___________________________________________________

How fast a loan pays off, or is expected to pay off, helps determine what an investor will pay for it. No one wants to pay 105 for a loan that pays off in two months. November-released pool factors indicated that October Fannie Mae 30yr prepayment speeds were down about 16 percent month over month (5.7 CPR), overshooting street predictions of speeds slower by -5-10 percent. Overall, speeds appear to have slowed by a bit more than expected. Slow single-digit speeds underscore the volume challenges many originators have faced through much of the year.

Your clients looking for a rate forecast? There will be no refi boom before Christmas, how about that? Most expect slightly higher mortgage rates and perhaps a bit more time before they come down as well. Some economists are pulling down their outlook for housing price growth (-1% from last month) and existing home sales (-100k annualized sales revision), while new home sales are running above expected as builders offload a glut of inventory.

But recently there are some early signs of stability in housing demand & supply. First, the pace of increases in mortgage rates (on a monthly basis) slowed to the lowest increase in 3 months. Meanwhile, several indicators of demand flattened out including the smallest weekly change in mortgage purchase applications in over a month. The Redfin Demand Index rose 0.5% after falling for most of the past 6 weeks and the decline in pending sales also stopped accelerating after eight weeks of worsening (touring data and Google searches reveal a similar trend). However, it's really too early to say if demand will remain stable and the uptick in mortgage rates this week suggests it probably won't.

Ahead of today’s midterms and inflation data later this week, we saw the FOMC raised the Fed’s overnight borrower rate by another 75-basis points last week to 4 percent, as expected, following their November 2 meeting. While there was some language in the statement that many initially interpreted as dovish, Fed Chairman Powell noted it was “very premature” to consider a pivot in monetary policy. He was direct when he said he expects the peak Fed Funds Rate to be higher than previously expected. It is possible that the unemployment rate and the fed fund rate will both need to be greater than 5 percent for the FOMC to consider a change in direction.

Business sentiment continued to soften in October as the ISM Manufacturing Purchasing Managers Index (PMI) declined from 50.9 to 50.2. Raw materials prices fell for the first time in two years. The Services PMI also declined in October as business activity fell. The jobs market continues to expand at a slower pace and the unemployment rate ticked up to 3.68 percent.

Today’s calendar is under way with the NFIB Small Business Optimism Index for October (). Later this morning brings Redbook same store sales and a Treasury auction of $40 billion 3-year notes. Today is also election day where the Republicans are favored to take back control of the House and possibly the Senate. We begin the day with Agency MBS prices little changed from Monday and the 10-year yielding 4.20 after closing yesterday at 4.21 percent.

I’m at a place in my life where errands are starting to count as going out.