11.16.21 Brett Brumley and Mark Workens on Digital Transformation; The Latest Narrative Surrounding Inflation

In order to stay competitive and differentiate in the tight market, lenders need to find efficiencies and tighten their operations leveraging systems designed by mortgage experts for mortgage experts. Richey May’s advisory services team is made up of mortgage industry experts and designed to help you find efficiencies in the pursuit of compliance and assurance so that you can continue to drive growth and increase profitability. Visit https://richeymay.com/advisory/ to learn more about how you can differentiate your business or to set up a meeting with one of Richey May’s experts.

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“Poor man wanna be rich, rich man wanna be king, and the king ain’t satisfied ‘til he rules everything.” I mention this, not to point out what Bruce was up to when he was 30 years old, but because yesterday in Wichita I passed by the estate of Charles Koch. Like any billionaire he and his family have their share of friends and foes. As a billionaire he probably doesn’t care much his individual credit report, but I received this note from a brand-spankin’ new LO. “Rob, is there a legitimate free site I can recommend to my clients to receive an actual accounting of one’s credit report once a year or can open disputes with bureaus? Here you go. This is an example of MLOs providing value and guidance to clients versus the internet. While we’re on “adding value,” Axis Lending Academy is the first non-profit education platform designed to bridge the opportunity gap in our biz by acting on DE&I initiatives and providing access for driven & diverse learners to participate in our industry. “We provide a free-to-learner education program, complete with an interactive lab experience, mentorship, professional development, wellness program, and a paid internship, and a whole-life approach to education and empowerment.” Call Paul Gigliotti (415-846-2023) to find out how you can participate in bridging the gap. (Today’s audio version of the commentary is available here and features an interview dissecting technical implementation and business transformation with Lender Toolkit CEO Brett Brumley and Mark Workens, CEO of Mortgage One. This week’s is sponsored by Richey May, providing specialized advisory, audit, tax, technology, and other services in the mortgage industry and in banking.)

Jobs & a retirement

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Unbeknownst to most, today is National Button Day. This small but important item has held fabrics together since the 13th Century, which makes me think of something else that’s been ‘buttoned up’ in recent years: reverse mortgages. Although complex in nature, this specialized product is important to 79.6% of all U.S. homeowners, and thanks to overhauls in program rules and requirements, these loans present a safe, viable option for senior homeowners. To deepen its bench strength, Mid America Mortgage has hired reverse mortgage veteran Dennis Loxton as national sales manager to fuel the company’s recruitment efforts as it seeks to expand its reverse mortgage footprint nationwide. Committed to providing loan products that serve all types of borrowers, Mid America understands how reverse mortgages can be used to meet the unique financial needs of senior homeowners. LOs interested in joining Mid America’s reverse mortgage team should contact Dennis.

Congratulations to Wells Fargo’s Eric Stoddard who, giving three months’ notice, announced his retirement in the Spring of 2022. (Eric came from the old days of Pru.)

Broker and lender services & products

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163,000 pints of Guinness are wasted in facial hair each year, according to the Irish brewery, which commissioned a hair scientist, among other researchers, to calculate the loss. That’s because 0.56 milliliters of Guinness are trapped in the average moustache at every sip. I’m reminded of how paper, and PDF-based borrower verification methods, cost lenders precious time (and dollars) at every run. Thankfully, FormFree simplifies verification of assets, income, and employment (VOA, VOIE) for lenders so they can enjoy its cost-saving benefits. With dozens of POS and LOS integrations (OpenClose is the latest) as well as direct access through FormFree’s cloud-based Verifier Dashboard and Passport mobile app, it’s easy for borrowers to provide their data for verification at any point in the lending process. So easy, in fact, that the majority of borrowers choose to electronically validate their data with FormFree when given the option. To learn more, contact Gregg Palmer.

“1 UW Touch on 70% of loans!” If you could minute, would you? What if every loan came with >$1,000 more profit? Borrower surety in one day? A defect policy? Candor is the only technology that automates the costliest parts of the manufacturing process, and stands the decisions. Calculate your ROI here.

melloYOU 2.0 is live! This tool is a personalized website built specifically around your personal business. It includes your production data, competitor information, market demographic details PLUS hours of video content hand selected to help you strategize and continue to build your business. The content is refreshed quarterly to reflect what’s relevant to the current market. During our launch, we created over 5,000 customized sites so we know it’s something that mortgage professionals (like yourself) need in their toolbox! Team loanDepot built this to add value to the market and it’s completely free! Don’t miss out on your chance to get your site activated today… Simply submit your request here.

The internet is “alive” and decentralized, and the social media landscape continues to rapidly evolve. What was once an afterthought to many lenders’ marketing efforts is now a crucial component. However, many companies begin using social media without defining their goals, desired outcomes, or target audiences. Others fail to stay up-to-date with the changing regulations surrounding social media that impact their businesses… A fateful error in a time when the size and scope of social media platforms command the attention of lawmakers and governments. Black Knight’s Michael Stallings, vice president of Comergence solutions, dives into these topics and more in a recent HousingWire interview. Additional subjects include the importance of claiming all Google My Business pages, and how the Comergence platform helps originators engage customers with valuable content while managing ever-changing regulatory compliance. Learn about Black Knight’s Comergence social media suite: the only platform built specifically for the mortgage industry.

As rates are expected to rise, it’s more important than ever to hold onto your customers. Caliber Reconnect leverages the data science and industry-leading recapture techniques to provide loan officers with alerts that indicate borrower actions and propensity to refinance or purchase. We also work to refer customers back when customers call in for servicing or visit our web properties. It’s all geared to elevate our broker partner’s business through our world-class servicing and marketing retention capabilities. Use the technology that makes a difference when you become an approved partner at Caliber Wholesale. Watch this video about Caliber Reconnect and then email Whslcontactus@caliberhomeloans.com to see how you can put your experience and Caliber’s technology to work for you.      

Get ready to crush your 2022 goals! Capacity, an AI-powered support automation platform, is offering FREE consultations to mortgage companies that would like to learn more about automation. During a 30-minute phone call, you’ll talk with an industry expert to uncover what processes and tasks in your company are ripe for automation. Capacity empowers mortgage professionals with instant knowledge and automated workflows. Are you ready to provide a superior employee experience? If your answer is “yes,” there’s no better time to start on your automation journey. Let's connect!

Thanksgiving is fast approaching, and people across the country are preparing for the big day, whether by calling on the experts at the Butterball Hotline or simply locating their Thanksgiving pants. Similarly, lenders are already starting to prepare for 2022, and it’s time to call on the experts. While professional development took a backseat during the pandemic as loan teams had their hands full, it’s time for lenders to pick up where they left off and deliver the compliance and technology training that is essential to sustainable growth, long-term profitability, and risk management. Looking to put together a recipe for success for 2022 and beyond? Join Sales Boomerang’s Alex Kutsishin and Knowledge Coop’s Ken Perry on Nov. 18 at 2:30 pm ET to learn more. Save your seat at the table today.

Floify, the mortgage industry’s leading point-of-sale technology provider, continues to deliver massive value and cost savings to lenders via the platform’s native e-signature solution: Floify E-Sign. With this incredibly powerful and modern e-signature functionality at their fingertips, enterprise mortgage lenders are able to craft a seamless, end-to-end digital mortgage experience for their borrowers without increasing costs or adding vendors to their tech stack. If your organization is seeking to build a dynamic, streamlined loan origination process that empowers borrowers to quickly complete an application, submit documentation, and sign everything from initial disclosures through closing documents in a fully-branded and secure portal, then look no further than Floify. Schedule a personalized demo to see how Floify’s customizable platform can help you reach your business goals.

TPO loan products

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Get the DSCR Advantage with LoanStream! 85% LTV DSCR Purch/Rate and Term, DSCR for Investors, down to 620 FICO and loan amounts up to $5 million! Plus, get trained on our new TPO Portal, The Lounge. One of the most powerful tools to help brokers close more loans. Learn how to submit, price, and disclose loans in minutes. Spots are limited, reserve now: The Lounge - Submit, Price and Disclose in The Lounge (loanstreamwholesale.com)  Stand out with the ONE Lender that makes you the ONE to call. Contact your Account Executive today. Visit www.LoanStreamWholesale.com for our great rates and programs.

Northpointe Bank Correspondent Lending announces recent enhancements to its Investor Cash Flow program, allowing eligible borrowers, including LLCs, to finance investment properties based on the cash flow of the subject property rather than utilizing the borrower’s income. With loan amounts up to $2,000,000 and loan-to-value ratios up to 80%, Northpointe’s Investor Cash Flow includes fixed-rate, adjustable-rate, and interest-only options. The program allows cash out up to $500,000 on refinances, has a minimum debt-service credit ratio (DSCR) of 0.75, and is eligible for non-warrantable condos and condotels. Available in all 50 states and the District of Columbia, Northpointe Bank provides tailored solutions to maximize your profitability and help grow your business. View program details for more information or email us at correspondentsales@northpointe.com.

Lenders & investors follow Freddie & Fannie… or not

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Traditionally the conforming conventional loan amounts for next year are announced by the FHFA, which oversees Fannie and Freddie, around Thanksgiving or shortly afterward. But that hasn’t stopped, given the undeniable documented appreciation around the nation, investors and lenders offering higher loan amounts for these loans lend by PennyMac.

Fairway Independent’s wholesale division announced additional eligibility for estimated 2022 conforming loan limits. “Effective on and after 11/15/2021, including loans in process, Fairway will permit the use of estimated loan limits for High Balance / Super Conforming loans located in specific counties within the following states: California, DC, Idaho, Maryland, Massachusetts, New Jersey, Pennsylvania, Virginia, Washington, West Virginia, and Wyoming.” There are certain restrictions for brokers; Please click here to view eligible counties and max loan limits.

Stay up to date with what's happening, loanDepot Wholesale Newsletter-WTNW Covers Conforming 2022 Loan Limits, Freddie Mac - Age of Documentation Requirements for Paystubs Conventional - Texas Homestead Refinance Expansion, loanDepot VA Lending Guide - VA Leasehold Property Updates.

In October, PennyMac Announcement 21-79 described increased high balance loan limits for select high-cost area counties up to $937,500 for one unit properties. At that time, the loan limit increase for loan amounts exceeding $625,000 that were also in excess of the 2021 high-cost limit were subject to an LTV maximum of 80%. In Announcement 21-93, PennyMac announced an LTV increase of up to 95% LTV.

First Community Mortgage expanded Conforming Loan limits. For details, view FCM Correspondent Announcement 2021-22 or FCM Wholesale Announcement 2021-30.

Effective yesterday, November 15, Flagstar Bank will implement increased LTV/TLTV limits for certain two, three and four-unit property transactions under the Freddie Mac Home Possible.

In anticipation of the FHFA conforming loan limits increase for 2022, Mountain West Financial Wholesale will begin offering conforming loan amounts up to $625,000 on 1-unit properties effective immediately. Loan limits for 2-4 units have also been updated. Details are available in Mountain West Financial Wholesale Bulletin 21W-075.

PennyMac led the industry by being the first lender to support Conventional loan balances to $625,000 in all states and all counties (except for New York). PennyMac followed this up by once again leading the industry to support high balance limits up to $937,500 in select high-cost area counties. Hear more about this new announcement from PennyMac’s Senior Managing Director, Kim Nichols. For more information and the list of counties, read PennyMac Announcement 21-31.

As of Friday, October 15, 2021, Flagstar Bank is accepting the anticipated 2022 FHFA conforming loan limits for 15 & 30 year fixed standard balance agency products. View

Flagstar’s Announcement 21140 for details.

Capital markets

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This week doesn’t have a lot of market-moving data, which means the narrative surrounding inflation should dictate rate movement. The biggest headline last last week reaffirmed what every consumer already knows: Everything continues to get more expensive. The consumer price index increased 6.2 percent over the last twelve months which was the highest rate since 1990 and well above the Fed’s 2 percent target. Producer prices were up 8.4 percent over the last year as well. The many underlying factors such as material costs, labor shortages, and supply chain disruptions point towards continued upwards price pressure through the beginning of next year. High inflation certainly impacts consumer sentiment. In October, 51% of small businesses surveyed said they were planning on raising prices over the next three months. September’s “quits” were at a record 4.4 million or 3.0 percent, according to the Labor Department. Many job seekers may also be switching professions which will require additional training and add time until a full labor market recovery is realized.

Given this, the latest chatter has the Federal Reserve speeding up its reduction of economy-supporting asset purchases in light of the fastest inflation in 30 years. There is also some talk, given the house-price boom, that mortgage-related purchases should stop sooner rather than later. Recall that the Fed only mapped out its tapering for two months. After that is anyone’s guess.

What does it all mean for mortgage rates? Well, the 10-year Treasury yield rose to its highest level in nearly three weeks yesterday, with mortgage rates following suit, with the spread in yields, as usual, based on prepayment speed and credit risk. Oh, and speaking of the Fed, reports say that President Biden will decide this week whether to renominate Fed Chairman Powell for another term.

Although we will get some important housing data later this week with housing starts and the NAHB Housing Market Index, the biggest day for non-housing data is today with the all-important retail sales (+1.7 percent, ex-auto +1.7 percent, control group +1.6 percent) and import prices (+1.2 percent, half due to petroleum, +10.7 percent for the year), both for October. Later this morning brings Redbook same store sales, industrial production and capacity utilization for October, September business inventories, and the NAHB Housing Market Index for November. We also have a full slate of Fed speakers with Atlanta’s Bostic, Richmond’s Barkin, Philadelphia’s Harker, and San Francisco’s Daly. Today’s MBS purchase schedule sees the Desk targeting up to $5.6 billion of 30-year 2 percent and 2.5 percent. Before either operation, the Desk will purchase up to $5.3 billion 4.5-year to 7-year treasuries. We begin Tuesday with Agency MBS prices worse a few 32nds from Monday’s close and the 10-year unchanged at 1.62 percent after the strong retail sales number.

I have trouble enough keeping my balance when I get out bed at 4AM to put the final edits on that day’s commentary. And then there’s this. (Of, if you prefer something with a little more daring, and like bike riding & The Grand Canyon, here you go.)