7.18.23 Rent-to-Income Across America; MBA's Justin Wiseman on Regulatory Issues; Volatility Subsiding

Thanks to today's sponsor, Richey May. Richey May is a recognized leader in providing specialized advisory, audit, tax, technology and other services to the mortgage industry for almost four decades. Among many awards, Richey May has been named a Top 100 Firm twice and is known in the market for their education and contributions to the mortgage industry. They don’t just hire from the mortgage industry; they have the experts who build it.  To experience how Richey May can help you transform your mortgage business, visit richeymay.com.

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There’s a definite shift going on in banks as continued layoff rumors in jumbo and portfolio divisions are rampant. At the other end of the job chain, people’s circumstances about how they entered our business are often fortuitous, or interesting. A good conversation topic at mortgage gatherings is how someone got into the business. Santa Rosa’s Brian Goulding, for example, has a solid accounting background which morphed into being a loan officer. I was a food science major. Another good conversation topic is how LOs use rent, and rent increases, to prompt buyers. Since 2009 rent prices have grown by 60 percent or more in seven U.S. cities: San Jose (85 percent), Denver, Seattle, Portland, San Francisco, Nashville, and Austin (60 percent). Rent prices are also rising faster than incomes, which forces tenants to shell out a greater share of their wages on rent. At 28.5 percent, Miami has the highest rent-to-income ratio of the 50 largest U.S. cities, while Cincinnati has the lowest at 15.5 percent. The rent-to-income ratio declined in only four cities: Cleveland, Pittsburgh, Buffalo, and Providence. (Today’s podcast can be found here and this week’s is sponsored by Richey May, a recognized leader in providing specialized advisory, audit, tax, technology and other services to the mortgage industry for almost four decades. To experience how Richey May can help you transform your mortgage business, visit richeymay.com. Hear an interview with MBA’s Justin Wiseman on recent issues MBA has commented on and top regulatory/enforcement items that the industry should be aware of.)

Employment

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In an industry constantly buzzing with discussions about adopting new technology to enhance efficiency, it's crucial to discern between the mere promise of improvement and tangible solutions. While AI and third-party apps may offer some enhancements, the real game-changer lies in embracing new and innovative Loan Origination Software (LOS). Explore a series of bite-sized 30-second clips in our "Canopy Tech Features" playlist to witness the transformative features that set Canopy Mortgage apart from the rest. Don't settle for empty promises. Let us demonstrate how our LOS revolutionizes the mortgage industry, streamlining processes, and empowering loan officers like never before. Join us and experience the future of mortgage technology. Reach out to Josh Neumarker at Canopy Mortgage for more information 888-696-9076.

Want to work for the FHA?

A Management Analyst vacancy (up to $140k) in Denver, Colorado to prepare long-range and short-range planning guidance in accordance with broad agency program policies and objectives. Lead and conduct special cost-benefit analyses, studies, reports, surveys, inquiries, and evaluations. Develop, manage, and/or coordinate hiring programs. Perform continuous appraisal of the utilization of resources in accomplishing program objectives and goals.

A Senior SF Housing Specialist (QAD) in Denver Colorado. Responsibilities include acting as a HUD expert and advisor on the lender origination and servicing practices required for compliance, perform reviews and analyzes reports from onsite reviews of Title I and Title II lenders to determine compliance, recognize facts and evidence and are able to assemble, correlate and analyze information obtained in reviews and investigations.

At up to $135k per year, be an Appraiser: review and manage appraisals assigned for the purpose of identifying issues or problems conflicting with FHA regulation. Resolve valuation issues involving common problems, and provide guidance to appraisers, lenders, home buyers, builders, real estate agents and the general public.

Anchor Loans, providing financing to residential real estate developers, builders, and entrepreneurs, announced that Jim Fraser has joined the company as Chief Operating Officer to be responsible for the customer experience that Anchor delivers as well as the day-to-day operations of the company. He will also take the lead in expanding Anchor’s homebuilder and build-to-rent (BTR) finance programs.

Lender and broker software, services, and products

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“Hey, lenders! Do you find it challenging to tie together your front-end pricing, pipeline hedge and MSR valuations so you can better manage margins in this extremely competitive landscape? Optimal Blue has the experience, expertise, and market-leading tools you need to dig deeper and develop winning strategies. Here’s how we bring it all together. Our product, pricing, and eligibility engine helps you engage customers with accurate, real-time rate quotes for all varieties of product offerings, simultaneously providing insight into your competitive positioning. Our pipeline risk management solutions provide a full spectrum of functionality from note rate hedging to bulk aggregator sales to MBS pooling, underpinned by the industry’s leading hedge and pipeline analytics. Finally, our MSR integrations allow for market value loan-level pipeline valuations, providing unmatched accuracy from point-of-sale through capitalization to better align your accounting marks and put you in control. Contact Optimal Blue to learn more.”

With first mortgage rates rising and inventory dropping to record lows, many lenders are looking to turn up the volume on their HELOC business. Many of these lenders have begun aggressively advertising these solutions, many even announcing “HELOC Promos” on billboards, marques, and in digital advertising. In other words, the HELOC market is starting to heat up and your competitors are beginning to make a big grab for this business. Don’t let them get to your borrowers before you do! With Symmetry, you can offer your borrowers one of the best HELOC options on the market, offering rates as low as Prime minus 0.25%. Let Symmetry help you present this solution to your borrowers before they go somewhere else. Contact your Area Manager today!

“Happy National Broker Day from AFR Wholesale® (AFR)! As independent mortgage brokers, we value the strong relationships you build with your clients and the trust you cultivate during the home buying process. We want to express our gratitude and say 'Thank You' for your contribution. Without you, we wouldn't be able to help so many families achieve their homeownership goals. To celebrate Third Party Originators, we’re pleased to offer a special promotion. For any loan locked through AFR Wholesale today, we will lower our underwriting fee by $300. Take advantage of this reduced pricing on our full suite of programs, including Conventional, FHA, and USDA mortgages, as well as a variety of specialized programs for construction, renovation, manufactured housing, and more! Check out our programs here. Contact AFR by visiting here, sales@afrwholesale.com, or calling 1-800-375-6071. Join us in celebrating National Broker Day and let's continue making homeownership dreams come true!”

“Here comes the attention grabber; Loan officers, you can generate leads and closings for free! Now is the part where we do the ol’ switcheroo since we have your attention, but that doesn’t add any value, and this is not the market for that nonsense. So instead, we wanted to invite you to attend our Success Seminar this Thursday, where you will learn how to generate thousands of leads and apps using social media directly from one of your mortgage brothers-in-arms. Join rebel iQ’s EVP of Growth, Jason Frazier, and Josh Dobson of Bluprint Home Loans as they give you the playbook on how Josh’s Team has become social influencers to get tens of thousands of followers and video views to generate closed loans. If you are looking for ways to fill your pipeline in this market, make sure to register today.”

Simplifile® by ICE Mortgage Technology® is excited to announce its integration with The Closing Exchange (TCX), a leading provider of mobile notary services, to enhance the capabilities of Simplifile eSign Events. This integration supports settlement agents and lenders who wish to conduct remote online notary (RON) transactions but may not have a licensed notary on staff or the necessary infrastructure to facilitate such closings. By leveraging The Closing Exchange's extensive network of notaries, and their expertise in performing signings, Simplifile eSign Events customers can now seamlessly conduct eSign transactions online and have them witnessed by a notary who is already trained and set up in Simplifile eSign Events.

FundingShield, the market leader in wire & title fraud prevention, released its Q2-2023 Fraud Report showing 50.2% of transactions (on $68bn in loan volume reviewed) had deficiencies last quarter. Q2 yielded an all-time high for agent licensing/good-standing issues indicating more agents are failing to keep their licenses active with state licensing bodies. Business email compromise is one of the most rampant ways that fraudsters scam parties in a real estate transactions per the FBI. FundingShield’s CEO, Ike Suri, commented, “The FBI’s report of $10.3B in fraud losses is grossly underreported based on our experience identifying, preventing, and remediating issues in real-time”. FundingShield prevented yet another BEC attack hours before 4th of July this year. A title company’s email systems were compromised, and fraudulent wire instructions were distributed, but FundingShield’s real-time data/document review identified the fraud, protecting the lender, buyer, and seller from losing over $400,000.00. Contact us for free trials.

Mortgage leaders: The home insurance market is facing unprecedented volatility with carriers declining new business and increasing premiums to an all-time high. This can delay closings and even lead to DTI exceeding acceptable limits once accurate insurance costs are factored in. Matic, a home insurance marketplace built for the mortgage industry, helps borrowers save time by shopping multiple A-rated carriers at once and providing transparent pricing and coverage options. With flexible integration options for your company, Matic adds visibility and control, allowing lenders to foresee potential issues that could result in delayed closings. To learn how mortgage enterprises can gain efficiencies and add a new source of revenue with Matic book a demo today. For more strategies on how to navigate the next phase of the housing market, get Matic’s latest report.

“For independent mortgage banks coping with shrinking production volumes and rising costs per loan, outsourcing accounting is an elegant solution to what’s become a very common challenge. Whether you have no accounting expertise in-house or you have a new team with no mortgage experience, you can tap the Richey May Client Accounting and Advisory Services (CAAS) team for the support you need. This team is stacked with mortgage industry experts who can tailor your solution to meet your most pressing needs in a volatile time, with no training needed. Need help transitioning to loan level accounting? Need a fully outsourced function? You got it! Need industry training for your controller? We can do that. In this article, Richey May’s expert Kim Dittmer answers all your most frequently asked questions around outsourced accounting as a mortgage bank.”

Events, webinars, and training… this week!

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A list of upcoming conferences and major events can be found here under the “Conferences” tab. Meanwhile…

If you're in the Seattle or Boise area this July 18-20th, and looking to learn about incredibly unique purchase loan programs that will help you close more homes, the Guild Mortgage Homebuying Solutions Seminars may be a good place to get the inside industry scoop on the strategies and new product options available to qualify more buyers. Hear from Freddie Mac Affordable Lending Manager Nora Guerra, Clayton Homes CrossMod Development Manager, Andrew Bryant, and local Guild Mortgage leadership on the challenges and solutions to improve housing affordability in the Pacific Northwest. Invited are real estate agents, developers, aspiring homeowners, and any others with a vested interest in attainable homeownership. Guild is holding three in-person sessions: July 18th in Bellevue, WA, July 19th in Puyallup, WA, and July 20th in Boise, ID. 

Supervised and Government Applicants on July 18, 2:00 PM – 3:30 PM (Eastern). This webinar will provide a detailed overview of the FHA Lender Approval Application process, the eligibility requirements, and required documentation for supervised and government mortgagees. Common application deficiencies will be addressed and tips for submitting a successful application will be provided.

Join MBA/MW on July 18th at 2:30 PM EDT for a Top Producers Panel followed by a Happy Hour at Patsy's American. The registration fee includes 2 drink tickets and light appetizers: $45 for members and $75 for non-members.

National MI July 2023 webinar sessions: 5 Email Marketing Campaigns to Eliminate Cold Call Anxiety​​​​​ with Kendra Lee - July 18th at 1pm ET.

Become an expert in income calculation and a valuable resource for your clients, join LoanStream Mortgage for an informative webinar on July 18th at 11:00AM PT that will cover EZCalc Bank Statement Calculator, DSCR Calculators, and more. Don't wait as spots are limited.

Register for Angel Oak Mortgage Solutions Non-QM Webinar on DSCR Loans, Wednesday, July 19th, 1:00 PM EST. The first step in its series, this webinar details its no-income DSCR program that includes Investor Cash Flow and Foreign National loans. See how easily these loans close and help add to your bottom line.

Learn about the latest RESPA overview & legislative updates from Robert Finlay, Partner of Wright, Finlay, & Zak, and Colgate Selden, Partner of Blank Rome. Join California MBA for an informative webinar on Wednesday, July 19th, at 11:00 AM PST.

July 19th at 1PM CT join executives from Fairway Independent Mortgage Corp., Lennar Mortgage, Stavvy, Wolters Kluwer and Falcon Capital Advisors as they discuss the shift in approach from open-ended “digital journeys” to targeted incremental “sprints." We will delve into various aspects such as the prioritization of digital transformation projects, the evolving objective of achieving fully digital closings and eNotes, and the potential impact on the upcoming cycle.

Thursday, July 20 at 11 am PT is an NMP Webinar, Making A Great Second Half of 2023 (even with a slow homebuying season). Mike Darne, VP of Marketing at CreditXpert, will unravel the trends of this spring, help you discover potential new loans hiding in your database via the Mortgage Credit Potential Index (MCPI), and reveals the critical element that can supercharge your pipeline. You’ll also learn the key element that will empower your sales efforts (hint: trust).

PRMG’s FHA 203(h) product webinar is on Thursday, July 20. Learn more about the Mortgage Insurance for Disaster Victims program, which allows for up to 100% financing for the purchase of a new home for borrowers who owned or rented a home in a Presidentially-Declared Major Disaster Area (PDMDA) that was destroyed or damaged to such an extent that replacement is necessary.

Friday the 21st at noon PT is the next edition of The Mortgage Collaborative’s Rundown with Melissa Langdale and me. We’ll will be covering current events in the mortgage market for 30 minutes starting at noon PT in “The Rundown”.

Capital markets: lower volatility is helping mortgage rates

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Bets are being placed that the Fed is approaching the end of its interest-rate hikes versus the knock-on effects of a China slowdown. Many don’t trust China’s stats, but they show that China's Q2 GDP showed soft consumption, missing year-over-year expectations, and its economic slowdown risks having ripple effects across the global economy. Growth has slowed domestically, bringing inflation down with it, but the labor market continues to be quite strong.

In the U.S., the NFIB’s small business survey, released last week, reported only 29 percent of respondents saying they raised prices over the last three months, significantly fewer than one year ago. Additionally, only 15 percent of respondents expected to add to their payrolls in the next quarter which should help ease upwards pressure on wages as hiring becomes more focused and selective. Inflation is expected to continue to ease throughout the rest of the year although deflation is not expected overall. The Fed continues to maintain that two more rate hikes will be appropriate this year with the next hike expected following their meeting on July 26.

This week won't have much in the way of market-moving data, however we will get a lot of housing data, with the NAHB Housing Market Index, housing starts, and existing home sales. At this point, the Fed has all the inflation information needed to make the next interest rate decision. Keep in mind that yesterday Russia said it had pulled out of an agreement allowing Ukraine to export grain by sea. The deal was seen as key to keeping global food prices stable. Bond market volatility has fallen to the bottom of the range associated with the current Fed tightening policy, which should go a long way towards reducing MBS spreads and pushing down mortgage rates.

This morning we’ve seen retail sales for June, +.2 percent, ex-auto +.2 percent, versus expectations were for the headline to increase 0.5 percent month-over-month (previously 0.5 percent). Later are industrial production and capacity utilization for June, business inventories for May, the NAHB Housing Market Sentiment Index for July, and remarks from Fed Vice Chair Barr. We begin Tuesday with Agency MBS prices better by .250 and the 10-year yielding 3.75 after closing yesterday at 3.80 percent. The 2-year is down to 4.67 percent

I heard that a banana a day reduces your risk of colon cancer. Turns out you have to eat them.