3.2.23 Homeowner Equity; MGIC's Vance Edwards on Mortgage Insurance Misconceptions; U.S. Manufacturing Gauges

Today's podcast is sponsored by Built Technologies. Increase efficiency, streamline processes, and improve construction and real estate financing. Built connects lenders with key stakeholders to expedite funding and provide real-time deal visibility via a cloud-based digital platform.

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Hey, why wouldn’t you want to join the Mortgage Action Alliance? It doesn’t cost you a penny, and there’s strength in numbers. Signing up takes about 90 seconds. And the information you receive is much more reliable than mine! The U.S. Census Bureau produces some reliable information, unless you’re some conspiracy theory nut, and they have information that loan officers love: where most owners are free and clear of any home loan. And 30-year rates, which probably won’t be down to 2.75 percent again in our lifetimes, are less expensive than credit card debt, so there is business to be had. California has 2.4 million households free-and-clear of mortgage debt, the third-highest count among the states. There’s Texas at 2.9 million, and Florida at 2.5 million. After California comes New York at 1.7 million and Pennsylvania at 1.5 million. West Virginia has the largest share of free-and-clear owners at 53%, followed by Mississippi at 51%, North Dakota and New Mexico at 47% and Louisiana at 46%. Texas and Florida were both at 43%. (Today’s podcast can be found here and this week is sponsored by Built Technologies: Increase efficiency, streamline processes, and improve construction and real estate financing. Built connects lenders with key stakeholders to expedite funding and provide real-time deal visibility via a cloud-based digital platform. Today, an interview with MGIC’s Vance Edwards dispelling common mortgage insurance (MI) misconceptions.)

Employment & transitions

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Ready for the next journey in your career? Northpointe Bank, a top-performing bank in the nation*, provides a solid path for your success. As a federally regulated bank with home lending at the heart of what they do, Northpointe operates with a low cost-of-funds providing more competitive pricing for your borrowers. Their extensive home lending programs give you an edge, including expanded portfolio options and the ability to make common sense decisions, we help more applicants qualify. Additionally, Northpointe loan officers can lend nationwide in all 50 states allowing you to extend your market beyond what you ever thought possible. If you are an expert home loan professional ready to grow and thrive, learn more or email. *For each of the past nine years, Independent Community Bankers of America® has ranked Northpointe Bank as a top-performing bank in the nation out of approximately 5,000 ICBA member banks. Not all loan programs offered in all 50 states.

“When you #LandAtPlanet, our mission is your mortgage career! MLOs can increase purchase volume with Planet’s niche products targeting today's market. Conventional, government, Jumbo? Of course. But that’s just the beginning. How about bridge loans so your borrowers can buy while they live in and sell their current property? Or Cash 4 Homes so they can go toe-to-toe with cash buyers? Reach gig economy workers and the self-employed with bank statement loans, help dream-home seekers with one-time close construction loans, and put manufactured housing or ADUs within the reach of your customers. And since we retain the majority of the loans we originate, you can build customers for life because we put your name and face on every monthly statement. Reach out to Planet’s VP Talent Acquisition Peter Briggs (435-709-6278) today, and let’s get started on your tomorrow.”

You can’t fix tomorrow's problems with yesterday's technology. HousingWire just named Canopy Mortgage to its Tech100 list for 2023, one of the few mortgage companies that made the cut. Canopy's proprietary tech stack, Nano, consists of a proprietary LOS, POS, and Pricing Engine that provides a unified, elegant, and simple experience for everyone: borrower, LO, processor, and underwriter. The result, according to an independent study by the STRATMOR Group, is a reduction of 35% in costs to produce when compared to Canopy's peers.  So it’s better tech, and lower cost to produce which allows Canopy to pay its originators more money while offering better pricing than its peers. That's having your cake and eating it too. If you're a division manager, branch manager, or high producing loan officer contact Josh Neumarker at Canopy Mortgage for more information (888-696-9076).

Ginnie Mae is seeking an Executive Vice President and Chief Operating Officer (EVP and COO) to manage daily operations and serve as an integral part of the corporation’s leadership team. The role is responsible for managing Ginnie Mae's daily operations, including all mortgage-backed security operations, counterparty risk management, contracting, budget and legislative initiatives, and overall risk management of the organization through eight program offices, including the Office of the President. (And congratulations to Sam Valverde who was promoted to Principal Executive Vice President!)

Broker and lender products and services

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The best things in life are available to-go – Chinese takeout, grocery orders, your morning latte. It’s time to add another favorite to the list: the Optimal Blue PPE. That’s right, your trusted product, pricing and eligibility engine has gone mobile! Learn more about the free Optimal Blue PPE (OB) Mobile app for iPhone today. This highly anticipated app gives you access to the full array of pricing inputs you’re used to seeing on the web, with customization options to save favorite pricing scenarios for quick access. Refresh scenarios with the tap of a finger to instantly see the best product, rate, and price, saving valuable time and helping you enhance the experience for prospective customers.

With widespread layoffs across the mortgage industry, you may be looking for ways to do more with less. Well, Velma Connector has you covered. Connector enhances and extends your LOS with automated workflows across compliance, operations, management, and marketing activities. One example is the ECOA Adverse Action workflow, where Connector works with your LOS to automate the process, freeing up employees to focus on profitable activities while keeping you compliant. Connector sends out NOI letters/emails automatically to borrowers and even documents & stores every action for easy auditing. Join other top Lenders who have gotten their own virtual employee, today!

“Did you get into mortgage to manage compliance? Probably not, but we did. Firstline Compliance helps banks, IMBs, CUs, and Fintechs navigate the changes and the challenges of mortgage compliance, helping you do more with less. Led by mortgage vets Joshua Weinberg, Raymond Snytsheuvel and Roger Fendelman and staffed by some of the industry’s best, we‘re the risk and compliance experts and we’re ready to help you tackle your next problem. Whether it’s support for audit, licensing, operations, risk, tech, policies or compliance helpdesk, just let us handle it…so you can do your thing. Give us a [831-325-3369]call or drop us a line today.”

“We could not have moved the number of loans through our bank without United One. They help us close at least 10-20 additional loans per month that otherwise would be dead.”- Senior Mortgage Executive. Get the Most Out of Your Credit Provider. Clients view United One as an extension of their business. They value the on-demand availability, quick turnaround times on customer service requests and the one-on-one loan officer education which leaves them better prepared when meeting with applicants. United One has helped lenders close more loans, in a fraction of the time, by defeating trigger leads and providing credit score improvement advice. United One sells beyond the transaction, helping loan officers become trusted credit advisors and gain more business. The proof is in our performance. To learn how United One can help your team close more loans, click here to schedule a call with our team.

Wholesale and Correspondent newsbytes

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Get ready to energize your teams and learn new insights to win more business! Join Rocket Pro TPO next Monday (3/6) at 2pm ET for their next IGNITE Live meeting, hosted by Executive Vice President, Mike Fawaz! Find out how Rocket Pro TPO offers its partners more certainty, speed and expertise with Crews: A dedicated team for you. Talk to them to optimize your strategies around recent changes in the marketplace: FHFA LLPA updates, FHA MIP improvements and VA Funding Fee reductions. Recently, they introduced Fee Freedom, from offering partners free credit reports to paying for VA Non-Allowable Fees. And Rocket just announced a new Verbal Verification of Employment service for Non-Delegated Correspondent Assist partners! Interested in learning more about a Broker or Non-Delegated Correspondent partnership? Contact Rocket Pro TPO to learn more.

Brokers, stockholders, and competitors took note yesterday of United Wholesale (UWMC)’s earnings release. In 2022, UWM had $931.9 million in profit although it posted a $62.5 million loss for the fourth quarter. The company had a gain-on-sale margin in the 4th quarter of 51 basis points, down substantially from its full-year 2021 GOS of 114 bps. (Its 2022 GOS was 77 bps.)

Originations came in at $25.1 billion for the October-December period, down 24.9% sequentially. The fair value of its mortgage servicing portfolio fell by $150.8 million during the fourth quarter. The company ended the year with $312.5 billion of MSRs, which it valued at $4.45 billion.

The company’s press release said, “UWM earned approximately 54% of the broker market share in the 4th quarter, the highest share reading ever, and up from 41.3% in the third quarter. And for the second consecutive quarter, UWM is the number one overall mortgage lender in the U.S.”

Lenders and vendors tend to look at the mortgage banking results of publicly held firms as they announce key metrics against which others are compared. Recall that PennyMac Financial Services reported that origination volumes in the fourth quarter were $23 billion, down 12% from Q3 and 41% from a year ago. For the 2022 year, PFSI originated $109 billion, which was down 54% compared to 2021. As with nearly every lender, servicing profits made up for production losses. Production margins fell to 55 basis points from 99 in Q3 and 119 basis points a year ago, primarily due to the consumer direct channel profits falling dramatically while correspondent remained stable.

“When you choose Plaza Home Mortgage®, you can trust that we have your back. Since we opened our doors in 2000, we have prided ourselves on working hard for you…on every loan, every time. And that will continue. So, why choose Plaza? Click here to see for yourself. Plus, Plaza’s Co-President, Jeff Leinan, had the opportunity to hear first-hand why brokers love to work with Plaza Home Mortgage.”

To align with Fannie Mae® and Freddie Mac new requirements, Plaza will require the new Supplemental Consumer Information Form (Form 1103). This form will be required on all new Conventional (Fannie Mae and Freddie Mac) applications taken on or after March 1, 2023. This is an upfront disclosure and will be included in the package if you generate your disclosures through BREEZE.

In another important addition to its services, Carrington Mortgage Services is making it easier for customers to take advantage of assumable mortgages, allowing qualified buyers to purchase a home by assuming responsibility for the seller’s loan terms including the current balance, interest rate, remaining term, and any additional terms of the mortgage. Carrington’s real estate division, Vylla Home, can work with both buyers and sellers. Watch the video for more information on assumable mortgages.

PRMG TPO Resource Center Updates 23-02 includes updated forms including Appraisal Guidelines, Future Income Checklist, FHA Mortgagees Assurance of Completion, and various VA forms. The addition of multiple documents on Bond/Housing Authority/DPA Products, FHA HRAP and VAapproval submission forms for Condo Project Approval.

Effective for loans delivered to AmeriHome on or after March 1, 2023, Sellers must include the new IRS Form 4506-C (Rev. 10-2022). Sellers not already using the new Form 4506-C are strongly encouraged to do so immediately. Details are available in AmeriHome Product Announcement 20230208-CL.

Effective for all GSE loans delivered to AmeriHome with an application date on or after March 1, 2023, the SCIF Form 1103 will be a required document. If Sellers are not already using the SCIF Form 1103, then they should begin doing so immediately. View details in AmeriHome Product Announcement 20230209-CL

Citizens Correspondent National Bulletin 2023-05 includes information on Conventional Conforming Products cash-out refinance eligibility – DU and Dual Employment/Conflict of Interest on FHA Products.

Capital markets: the economy continues to move forward

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With loan volume remaining tight and rates rising again, it's as important as ever to ensure you’re receiving the best price for your loans. With MCT’s BAM Marketplace, buyers can bid regardless of approval status, and sellers receive automated live pricing from every buyer on the platform. This open loan exchange has helped lenders earn an additional 19 bps pickup vs. cover on average. Sellers can even execute co-issue transactions within the platform. “We used BAM Marketplace to find additional investors. Had I not had BAM Marketplace, we would have been holding onto a few million dollars in funded loans and I might not have this job to be telling the story to you now,” said Genesis Collins, VP of Capital Markets at Alpha Mortgage. Learn more about how BAM Marketplace is helping lenders identify new buyers for their loans or contact MCT for a personal demonstration of BAM Marketplace.

In interest rate news, March began with more selling in the bond markets, continuing the trend from February. Economic data on the day revealed that manufacturing for the U.S. improved in February versus January, per ISM, though it remained in contractionary territory for the third consecutive month. Prices increased again, which will concern the Fed as February inflation reports will likely be disappointing. Separately, the market responded to hawkish comments from Minneapolis Fed President Kashkari, who said that wage growth is too high and that inflation must be cooled.

Total construction spending declined 0.1 percent month-over-month in January when it was expected to increase. New single-family construction continues to be hampered by higher interest rates that are making construction projects more expensive to finance at a time when broader economic activity is slowing.

Today’s calendar kicked off with weekly jobless claims (190k, continuing to fall) and final Q4 productivity and unit labor costs (1.7 percent, falling, and 3.2 percent respectively, much stronger than expected). Later this morning, the Treasury announces the details of the mini-Refunding consisting of $40 billion 3-year notes and $32 billion and $18 billion reopened 10-year notes and 30-year bonds, respectively. Freddie Mac will release its latest Primary Mortgage Market Survey, and two Fed presidents are currently scheduled: Fed Governor Waller and Minneapolis President Kashkari. We begin the day with Agency MBS prices worse .250-.375, the 2-year yield is up to 4.93, and the 10-year yielding 4.06 after closing yesterday at 3.99 percent.

(Part 4 of 5.) You can retire to The Deep South where…

1.  You can rent a movie and buy bait in the same store.

2.  "Y'all" is singular and "all y'all" is plural.

3.  "He needed killin" is a valid defense.

4.  Everyone has two first names: Billy Bob, Jimmy Bob, Joe Bob, Betty Jean, Mary Beth, etc.

5.  Everything is either, "in yonder," "over yonder" or, "out yonder.”

6. You can say anything about anyone, as long as you say, "Bless his heart” at the end!

You can retire to Nebraska or Kansas where…

1.  You've never met any celebrities, but the mayor knows your name.

2.  Your idea of a traffic jam is three cars waiting to pass a tractor.

3.  You have had to switch from "heat" to "A/C" on the same day.

4.  You end every sentence with a preposition: "Where's my coat at?”