In a free market economy, supply and demand determine prices, like the demand for mortgage-backed securities impacting pricing, therefore mortgage rates. Another example… Here in the Texas Hill Country, folks have been known to enjoy a margarita or three. They have reason to celebrate, given our friend “supply and demand”: The price of one of the ingredients, Mexican agave, has plummeted as the effects of the tequila boom cause a major surplus of the agave used to make it. As recently as 18 months ago, a kilogram of agave hit the record price of 32 Mexican pesos ($2). As of this February, that had fallen to just 5 pesos, or $0.30, per kilogram, and analysts expect the price will continue to drop as the agave that growers planted continues to mature, which in the case of agave means that decisions made several years ago are finally hitting the market. The number of registered agave growers has quadrupled since 2018. Given the number of plants that went into the ground in 2021 and 2022, prices may not even hit bottom until 2026. Pass the lime!
Saturday Spotlight: OptiFunder
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“Revolutionizing Warehouse Management for Mortgage Lenders”
Describe your company (when was it founded and why, what it does, recent growth and plans for near-term future growth).
OptiFunder, the pioneer of the Warehouse Management System (WMS), was founded in 2018 to bring optimization and automation to warehouse lending. An award-winning mortgage software company, OptiFunder has announced a revolutionary new software for warehouse lenders, called Greyhound by OptiFunder, featuring the same scalability, security, and automation from its flagship solution.
Over the last five years, OptiFunder has developed the most comprehensive warehouse management system for mortgage originators. With 40% of top IMB’s on OptiFunder’s roster, 1 in every 7 loans funded across IMBs go through the OptiFunder system. Built by a team of mortgage professionals, the OptiFunder software not only reduces risk, but the user-friendly system condenses hours of manual work into automated tasks. From funding through loan sale, OptiFunder has automated the entire process for many originators.
OptiFunder’s innovative solutions and remarkable growth earned it a top 100 spot on Inc5000’s Fasting Growing Private Companies in 2023. From 2020 – 2024, HousingWire has named OptiFunder a Tech100 Mortgage Winner, and in 2023 and 2024 OptiFunder was recognized as a Progress in Lending Innovations Winner.
Describe any new products or solutions and how they will bring positive change to the industry.
“We wanted to create a platform for warehouse lenders that would run independent of OptiFunder but leverage the same technology and incredible team,” said CEO Michael McFadden. “While Greyhound represents a new brand, the underlying software, configurability, and proven rules engine have already routed and funded nearly a million loans with over 70 warehouse lenders.”
Greyhound provides new options for warehouse lenders looking for alternatives to legacy solutions. With its security-first design, highly configurable workflow, seamless integrations, and unparalleled efficiency, Greyhound is an ideal fit for warehouse lenders looking to grow market share in today’s challenging environment. With effortless client onboarding, robust reporting, and simple loan ingestion from originators, warehouse lenders of all sizes can easily scale their business with minimal cost and complexity.
Tell us about your team (what types of volunteer work are employees encouraged to engage in, how does your company help elevate growth, how does your company maintain culture in a work-from-home environment?)
OptiFunder appreciates its highly experienced team of professionals with over 125 years of mortgage banking experience, offering generous flexibility for work/life balance and volunteer work. Being part of OptiFunder means being first to market with breakthrough solutions.
Things you are most proud of that don’t have to do with sales.
OptiFunder is most proud of its customers’ experiences and positive feedback with not only the software, but with the whole team. “We’re a technology company,” said McFadden, “but it’s the direct feedback I get around our people at OptiFunder that means the most to me.”
Is there anything else you’d like to share along these lines?
OptiFunder released a monthly newsletter reporting on warehouse lending trends, available the second Tuesday of every month. Sign up here for next release on April 9th.
(For more information on having your firm’s extracurricular activities, employee growth, and your charitable side featured, contact Chrisman LLC’s Anjelica Nixt.)
Not concerned about compliance? Do so at your own risk
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MQMR released a Compliance Hot Topic on Fannie Mae’s recent guidance related to appraiser identity theft. In a recent Fraud Alert from January 2024, Fannie Mae identified a significant number of loans originated between 2021 and 2023, which involved appraisals completed by an unlicensed appraiser unlawfully using the identities of other actively licensed appraisers.
Lenders Compliance Group wrote about advice on revising the Fair Credit Reporting Act (FCRA) policies for transferring the credit report and application to another lender. In general, the FCRA affects any person or entity that is: a Consumer Reporting Agency (CRA), such as a credit bureau; users of the consumer reports that a CRA produces; or those who furnish information about consumers to CRAs. CRAs have several responsibilities under the FCRA, such as: ensuring that consumer reports are provided to others only for a purpose permissible under the FCRA; ensuring that consumer reports include required information but not information that is prohibited; disclosing information on file to consumers in response to their request; and investigating consumers’ claims of inaccurate information in a consumer report and correcting the information if it is erroneous. Anyone who provides a consumer report to others becomes a CRA[i] and is subject to the regulations governing these agencies. This is true regardless of whether the person prepared the consumer report or provided a copy of a consumer report prepared by someone else. The FTC concluded that the inclusion in a lender’s loan application of a section that enables the consumer to indicate consent for the loan application file to be forwarded to “other lenders” would be “… sufficient to satisfy the requirement that subsequent creditors have a permissible purpose to receive the consumer report included in the file. Such action can only be taken, however, in pursuit of the approval of the loan application.” Therefore, a consumer’s written authorization to submit an application to other lenders should be included in any situation where it may occur. This can be done separately, as part of the application, or as part of a broker agreement with the consumer.
Lenders Compliance Group wrote a blog on if TILA states a timeframe to initiate a lawsuit to enforce rescission. Many believe that the right of rescission is not open forever to the consumer to file a suit to enforce rescission. A consumer cannot wait indefinitely before filing a suit to enforce rescission. TILA does not answer how long the consumer may wait, so a court facing the issue will borrow the most closely analogous state or federal limitations period. After that time period, a lender can at least be assured that the consumer cannot file a timely offensive court action. However, the consumer might be able to raise the fact of rescission as a defense to an action filed by the lender. TILA specifies that its rescission provisions do not affect a consumer’s right of rescission in recoupment under state law. A case, Shetty v Block, was decided by the U.S. Court of Appeals for the 9th Circuit, affirming a California federal district court decision. This decision offers some valuable insights in answer to the question. Regulation Z sums it up: “Any security interest giving rise to the right of rescission becomes void when the consumer exercises the right of rescission. The security interest is automatically negated regardless of its status and whether or not it was recorded or perfected. Under § 1026.23(d)(2), however, the creditor must take any action necessary to reflect the fact that the security interest no longer exists.”
Fannie Mae provided lenders with the following red flags for this particular mortgage fraud scenario: The unlicensed appraiser’s name and signature are not found in any capacity within the appraisals (or loan files); The company name, phone number, and address listed under “contact information” on page six of Form 1004 will be different from that of the licensed appraiser; Email contact information reflects a name other than the name of the appraiser who is listed as having performed the appraisal; The signatures of the “victim” appraisers appear forged and/or cut and pasted to the identified appraisals; Appraisal fees for the appraisals were paid with proceeds going directly to the mailing address of the unlicensed appraiser, not to the address of the purported appraisers.
Fannie Mae also advised lenders that they should perform thorough due diligence when retaining services of appraisers and other outside vendors, and utilize all available public records and licensing agencies in determining the validity of third-party documentation (including addresses) within loan files to help minimize the risk of appraiser identity theft. Fannie Mae maintains a dedicated Mortgage Fraud Prevention webpage, which provides valuable resources including publicly available data on fraud trends and recent fraud alerts.
Vendors/third-party providers: always up to something
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It would be impossible to find a lender that does not rely on an outside party for something, whether it is a service, software, analytics, insurance, whatever. Who’s doing what out there?
docutech Compliance posted Document Updates regarding eSign availability for Kentucky Homeownership Protection Center Notification to Homeowners.
Clear Capital, a national real estate valuation technology company, announced its Universal Data Collection™ (UDC™) has been updated to deliver Fannie Mae and Freddie Mac’s single data standard, Uniform Property Dataset (UPD), for property data collections. This latest development removes a number of complexities and makes property data collection review and underwriting easier and more efficient for mortgage lenders. Starting April 1, the UPD will be required for all new loan applications for Fannie Mae’s Value Acceptance + Property Data program and Freddie Mac’s ACE+ PDR solution. Powered by Clear Capital’s more than 20 years of property data collection experience, UDC provides fungibility and less complexity in management of loans, as well as ease of adoption with the availability of order management integrations, website ordering and API ordering.
Asurity’s RiskExec announced the availability of the Preliminary Modified Loan Application Registers (LARs) for Home Mortgage Disclosure Act (HMDA) 2023 submission data within hours of its release last week. More evidence – Risk Exec is not only the best fair lending and compliance software solution but also by far the fastest to disseminate data and undertake analysis.
Mortgage Cadence, an Accenture (NYSE: ACN) company, has released version 4.0 of its Mortgage Cadence Platform (MCP) Loan Origination System (LOS) with impressive new functionalities. Powerful new document management and data extraction features as well as updates to ensure compliance with the latest GSE requirements. MCP 4.0 will debut the first Limited English Proficiency (LEP) integration of its kind with Talk’uments, a digital language technology provider that assists lenders by providing personalized, accurate, loan documents and educational materials to loan applicants in their native language of Spanish or Chinese, with these language choices broadening in the near future.
LoanCare®, a top U.S. mortgage subservicer, is making it easier than ever for homeowners to manage their mortgages with the updated, proprietary My LoanCare Go mobile app. The award-winning app is part of LoanCare’s push to modernize mortgage loan management with made-for-mobile flexibility. The app’s features include biometric authentication with facial recognition, a message center to help homeowners stay up to date on their loans, and language preferences options in English or Spanish. With the new app, users can set up autopay and make secure payments, review monthly statements, manage paperless billing, track loan finances, escrow, taxes, insurance, and more. My LoanCare Go is available to download in the Apple Store and Google Play.
Arch Mortgage Funding, Inc. (AMF), a division of Arch Global Mortgage Group, has expanded its offerings to include non-QM loans as a correspondent provider. This move signifies a significant shift in the market, providing alternative liquidity sources to lenders and offering a valuable opportunity to stay ahead of industry trends. AMF’s non-QM product lineup includes a range of options to meet diverse borrower needs, including Debt Service Coverage Ratio (DSCR), 12–24-month Bank Statement, Asset Depletion, Interest-Only, and Expanded Guidelines. These products cater to loan amounts from $150,000 to $3 million, ensuring flexibility and accessibility for both lenders and borrowers.
Mortgage Capital Trading, Inc. (MCT®), the de facto leader in innovative mortgage capital markets technology, announced the release of pricing indications for the to-be-announced mortgage-backed securities (TBAs) used by mortgage lenders to hedge their open mortgage pipelines. MCT is proud to offer this new pricing service that is made possible through a technology licensing arrangement with leading fintech Agile Trading Technologies. Agile operates a request for quote (RFQ) platform that connects mortgage lenders with broker-dealers of all sizes. Contact MCT to learn more about how TBA indications help improve secondary market performance.
Digital language and limited English Proficiency (LEP) technology provider Talk’uments has partnered with Mortgage Cadence, a subsidiary of Accenture (NYSE: ACN), to offer multi-language resources to users of the Mortgage Cadence Platform (MCP) loan origination system. The integration will help provide LEP applicants and users of MCP with transactional clarity as they digitally apply for mortgages and access key educational materials specific to their loans. Users will now be able to access detailed financial education materials in multiple languages other than English, including Spanish, Vietnamese, Korean, Mandarin and more. Talk’uments’ digital language technology will further enable LEP users to better understand the key terms and features of their loans, including related costs, Loan Estimate (LE), Closing Disclosure (CD) and other TILA disclosures.
The largest eNote migration in mortgage history was recently completed by Snapdocs with Fairway Mortgage. The project was done as part of Fairway’s implementation of the Snapdocs eVault, outlined in this case study. Teri Pansing, SVP of Corporate Closing at Fairway, wrote, “We wanted to scale eNotes because it impacts efficiency in post-closing and delivery and so many other areas of our business. eClose is a better, easier, and more convenient option for our settlement partners as well who can now offer a more satisfactory experience for borrowers. The organization’s primary goal is to deliver convenient, stress-free closing experiences for borrowers. The branches know their customers and their circumstances best. We want them to have trust in the process, the platform, and the support to know that eClose is their best option.”
A little something for dog lovers…
I don’t care who dies in a movie, as long as the dog lives.
The world’s best antidepressant has 4 legs, a wagging tail, and comes with unconditional love.
Love is how excited your dog gets when you come home.
Visit www.robchrisman.com for more information on our industry partners, access archived commentaries, or to subscribe to the Daily Mortgage News and Commentary. If you’re interested, visit my periodic blog at the STRATMOR Group web site. The current blog is titled, “Wholesale Channel Overview and Outlook.” The Commentary’s podcast is live and at any place you obtain your podcasts (like Apple or Spotify).
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(Market data provided in partnership with MBS Live. For free job postings and to view candidate resumes visit LenderNews. This newsletter is for sophisticated mortgage professionals only. There are no paid endorsements by me. For up-to-date mortgage news visit Mortgage News Daily. For archived commentaries, or to subscribe, go to www.robchrisman.com. Copyright 2024 Chrisman LLC. All rights reserved. Occasional paid job & product listings do appear. This report or any portion hereof may not be reprinted, sold, or redistributed without the written consent of Rob Chrisman.)
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