Aug. 7: LO jobs; workflow, servicing, PPE, hedging, DPA, ROV guide tools; misc. policy & procedure changes; M&A continues

Some things are surprising, like this video of a small child being chased by a wild pit bull. (Parental discretion may be advised.) What if you’re a landlord in a rent control area, and your monthly insurance bill surprisingly just double or tripled, now what? You can’t pass that on to tenants. Although many expect rates to decline, the rapidity of the recent drop was surprising. How much of a shot in the arm can the industry expect? You can bet good money that whoever owns the servicing on that 7 or 8 percent fixed-rate loan, originated earlier this year or last year, has already reached out to that borrower. That would not be surprising. What would be surprising is if the originator, even though he or she doesn’t own the servicing any longer, hasn’t contacted the borrower with important points about refinancing, and made their value proposition clear. But talk to your capital markets team about EPO penalties! (Today’s podcast is found here and this week’s is sponsored by PHH Mortgage. If you are looking for a Correspondent Lending partner or an experienced, award-winning subservicer who can manage your forward and reverse, residential and commercial, and performing and non-performing loans, look no further than PHH. Hear an interview with the Institutional Risk Analyst’s Chris Whalen on ways to intelligently improve risk-based capital requirements.)

Employment, and a death

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“Loan officers: Have you ever read the book ‘Unreasonable Hospitality?’ This game-changing book offers invaluable insights into how providing exceptional ‘Service’ together with the color of “Hospitality” can set you apart. So, what’s the difference? Service is ‘Black & White’ the backbone of any successful loan officer's business; meeting commitment dates, streamlined processes, competitive rates, products & programs. Hospitality is the ‘Color’ making people feel great about what you're doing for them; surprising, delighting and being true champions of dreams. In the competitive world of mortgage companies, service is expected… It's the standard. But what sets top-tier LOs apart isn't just service; it's the vibrant color of hospitality that makes clients feel truly valued. At radius, we have been providing exceptional service to our loan officers for 25 years, the difference is, we prioritize ‘coloring YOU’ with unreasonable hospitality. For confidential inquiries, contact Carla Herrera.”

We continue to be reminded that life is short. Bill Giambrone, former CEO of Platinum Home Mortgage and one of the founders and the first President of the Community Home Lenders of America, passed away after a debilitating heart event at age 58 which left him virtually lifeless for two years. I met Bill occasionally over the years, and he was a stand up guy. People like him will be missed in our biz, and platitudes included being a leader and pioneer, intelligent, boundless energy, a friend to all, tireless, collegial, jovial, and passionate.

Lender and broker software, products, and services

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“Truv income and employment verification (VOIE) and assets (VOA) are made for any customer. It doesn't force you to combine different solutions to get the job done. It customizes the verification type for each customer to optimize conversion. How does it work? We have 3 ways to verify income: Payroll login, Bank Login and Document Upload. We use Smart Routing to decide if a customer goes through the Payroll login or the Bank login. This model was trained on over >10M of transactions. Smart Routing optimizes conversion based on what we know about the customer and the 300,000+ employers we’ve seen. We use our Document Upload process for cases where it doesn't make sense to send the customer to a Payroll or Bank verification, or when a customer doesn't complete the verification. Our process successfully verifies income in 75% or more of cases. Want to see how it works? Contact us!”

“The Olympic Motto is ‘Faster, Higher, Stronger.’ Go for gold with MQMR helping YOU comply faster, climb higher, and grow stronger! New regulations around appraisal bias and Reconsideration of Value (ROV) take effect this October, to ensure fairness and accuracy within the appraisal process. Newsflash: FNMA, FHLMC and HUD all published requirements related to ROV, and the federal agencies, including the CFPB, published Compliance Guidance. Lenders must develop policies and procedures, communicate the ROV process to applicants, provide a way for applicants to request ROV, and ensure legitimate requests are considered timely, with results communicated to the applicant. At MQMR, we’re here to help you navigate these new rules and achieve gold-medal compliance! MQMR can help you with every step of the process. (5 Quick Tips: Click Here!) On your mark, get set, go…Let's win this race together and ensure accurate and fair appraisals!”

More excitement is afoot this month at Down Payment Resource (DPR). For those who don’t know, DPR is more than the only comprehensive database of 2,400+ DPA programs. From lead gen to underwriting, its tools make supporting DPA easy so you can turn more homeownership dreams into reality. Since debuting its Encompass LOS integration this Spring, the company has brought on industry veteran Brad Cardwell as VP of sales and business development to support growing demand (many may know Brad from his tenure at Embrace Home Loans). Catch up with Rob Chrane and Brad later this month at CMBA Western Secondary. Or grab a spot on Brad’s calendar any time to uncover the DPA opportunity in your org’s footprint.

In today’s competitive market, many credit unions are facing challenges with new production and actively seek new strategies to stay ahead. One effective solution to consider is developing a mandatory hedging strategy, which can boost profitability and enhance the value you can provide your members. Join capital markets experts Steve Baselice and Jordan Palmer for the upcoming ACUMA Inside Track webinar, ‘Agency Mandatory Commitments,’ on Aug. 8, at 1 p.m. CT. Learn how a mandatory hedging strategy can improve operational efficiencies and increase profitability for credit unions. These experts from Optimal Blue will cover how you can gain greater insight into mark-to-market valuation, see more consistent gains on sales, and maintain transparency across the credit union. Manage market exposure risk effectively by working with a reputable hedge advisor and establishing a mandatory hedging strategy. Registration is open to all: save your seat today!

Digital, self-service capabilities benefit customers and servicers alike, which is why ICE is invested in an API-first approach to deliver more value through new features and plug-and-play integrations. From providing loan information to self-service tools, home maintenance options, property valuations and more, the ICE Servicing DigitalTM solution helps homeowners understand their mortgage, so they can feel confident about their loan and home. Read the blog on how ICE continues to focus on digital innovation to help servicers deliver a seamless digital mortgage experience for millions of homeowners.

Aluminum soda cans were introduced in the 1950s and became America’s drink packaging of choice in less than a decade. Aluminum’s malleability, making it easy to shape and produce at a fraction of the cost of glass or steel, was the critical differentiator. With LoanPASS, lenders gain affordable access to the most flexible pricing solution on the market, powered by an innovative, rules-based decision engine that outstrips legacy PPE solutions for efficiency and configurability. As Local Bank’s Rob Henger put it, “Something I spent 10 years trying to solve at my last bank, we were able to configure in 2 hours with LoanPASS.” Read the case study to discover a fast, flexible loan decision and pricing engine at a fraction of the cost.

CUSTOMERS ALWAYS WIN WITH SAGENT - 2Q24 REWIND. Another successful quarter for Sagent customers, and what better way to make a splash than with a quick and fun highlight reel. Sagent says that their customers relentless work to support American homeowners and buyers is what motivates their entire team to work harder and faster as they innovate for the future. Check out this quick and fun recap reel highlighting all their customer wins - plus, they’ve included a Fast Forward into 3Q, giving you a glimpse into what Sagent is up to and where they’ll be during conference season. Don’t get too comfy poolside, because they have a hot Q3 ahead! Check out the blog, watch the reel, and let Sagent know your thoughts.

Stop wasting money on expensive, third-party tools for workflow automation and stop paying your CRM extra money for this same functionality. Usherpa’s newest feature, Pipelines™, helps you easily create customized Experiences™ for every contact type and lifecycle stage based on automated workflows for any scenario with an intuitive drag & drop kanban interface. Pipelines™ is a free tool for all Usherpa users, including corporate stakeholders who can create Pipelines™, add call scripting, and push the finished product out to specific LOs, selected branches, or company-wide, instantly. Usherpa delivers the daily tasks to Loan Officers and LOAs via the in-platform dashboard, email notifications, and mobile app alerts. Pipelines™ usage reporting helps leadership teams oversee task management and workflow success. Schedule a demo with Usherpa to see this groundbreaking new tech.

M&A never sleeps

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Whether it is a branch making a move, or an entire company, mergers and acquisitions continue, and are expected to continue.

Yesterday Dave Pilotte, EVP at California’s United Reliance Wholesale, wrote, “I wanted to share some important news about URW. Our company is in the process of being acquired by another company. However, this acquisition will only involve our retail division. The acquiring company is primarily focused on Retail at this time, and Unified Reliance Wholesale will not be included in this sale. For this reason, URW will be wound down in a timely and orderly manner.

“I want to assure you that all loans currently in the pipeline will continue to be processed and funded. However, note that Monday, August 12th is the last day to lock in loans for a maximum of 30 days. Today is the last day to register any new loans. Lock extensions will be granted on a case- by-case basis. Our intention is to have all active loans funded by September 30th, 2024.

“We do expect the URW team to transition to another Parent company, and opportunity, though we are not in a position to provide specific details just yet. I will keep you updated as soon as more information becomes available…”

Misc. investor & lender policy and procedure changes

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Carrington Mortgage Services, LLC (CMS) is introducing Section 184 Loans for Native Americans for its retail lending customers. Loans offered through this program require a low minimum down payment, generally 2.25%, or as low as 1.25% for loans of less than $50,000. Section 184 loans can only be used for single-family homes (1-4 units) and for a primary residence. To read more visit: www.carringtonhc.com.

National residential lender PrimeLending, a PlainsCapital Company, now offers Loan LIft, a mortgage underwriting process that helps ensure borrowers’ positive financial behaviors, such as consistent rent payments, are captured during credit eligibility assessment, potentially resulting in better loan terms and more lending options. Loan Lift works through unique service model that combines innovative technology, a wide range of options, including 400-plus mortgage programs, and experienced mortgage experts. Tim Elkins, PrimeLending’s Chief Production Officer, said, “With Loan Lift we can offer our customers more options and more expertise when financing a home. It’s just one more example of how the customer always comes first at PrimeLending.”

Luminate Home Loans and its NEO Home Loan Division have teamed with zavvie, a real estate software technology company used by thousands of loan officers nationwide, to turn hundreds of home buyers, including first-time buyers, into cash buyers. Loan officers at Luminate Home Loans and NEO Home Loans can equip qualified first-time buyer clients with pre-approved cash offers, helping buyers "win the deal," according to company officials at Luminate and NEO. Traditional mortgages, FHA, and VA loans are all obtainable through this new program.

Citi Correspondent Lending introduced five new Best Practice documents addressing common co-op document deficiencies to help lessen these types of delays. Correspondents who deliver co-op loans to Citi are strongly encouraged to share this information with appropriate staff. View Citi’s announcement new Co-op document best practices.

Citi Correspondent Lending introduced a new addition to its Community Lending platform, Special Purpose Credit Program (SPCP). This program was developed to help meet home financing needs of borrowers with subject properties located in Majority-Minority Census Tracts within designated markets. With four loan plan options available using credit parameters from existing product/programs, it provides underwriting and down payment flexibilities while offering features that include closing cost assistance and a 250-bps pricing premium for qualified borrowers.

Beginning with rate sheets issued on and after Friday, August 2, 2024, a new AMI loan level price adjustment (LLPA) table will be available for Fannie Mae and Freddie Mac loan transactions. This will apply to Best Efforts commitments that meet the criteria listed in the AmeriHome Secondary Notification.

Capital markets: everyone take a breath and focus on apps

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It was about time that cooler heads prevailed. The steep stock selloff on Friday and Monday was more about panic than reason, as usual, and yesterday saw a sort of rebound, especially in bonds. Stock markets are fickle, and those movements can’t tell you much about the overall health of the economy. That means that sudden fears of a U.S. downturn over the last several days were largely misplaced. The Fed knows as much, and is unlikely to change its course of action due to a stock market correction.

It is important to note that the Fed worries about systemic risk in financial markets, not disappointed investors. Looking ahead, Fed Chair Powell’s Jackson Hole speech at the end of this month offers an opportunity to ensure the Fed stabilizes, rather than amplifies, market volatility.

July agency prepayments were released after yesterday’s close and into the evening. Based on selective cohorts, speeds increased between 10 percent and 12 percent on average along FN30, GNIIs and FN15s. A 15.8 percent increase in day count and a 14.3 percent month-over-month rise in refinancing activity offset turnover seasonals. Based on the outlook, paydowns and net issuance are projected at $80.7 billion and $15.5 billion versus $72.2 billion and $22.9 billion in June. Class A net is out tomorrow.

Today’s economic calendar is eerily quiet. The day kicked off with mortgage applications increasing 6.9 percent from one week earlier, according to data from the Mortgage Bankers Association. Treasury will engage in a couple of auctions, highlighted by $42 billion of 10-year notes. Later in the afternoon, the Fed will release June consumer credit, which is expected to increase $9.00 billion versus $11.35 billion in May. We begin the day with Agency MBS prices worse about .125, the 10-year yielding 3.93 after closing yesterday up 10 basis points at 3.89 percent, and the 2-year at 4.01.

My neighbor was working in his yard when he was startled by a late model car that came crashing through his hedge and ended up on his front lawn.

He rushed to help an elderly lady driver out of the car and sat her down on a lawn chair.

He said with excitement, "You appear quite elderly to be driving."

"Well, yes, I am," she replied proudly. “I'll be 97 next month, and I am now old enough that I don't even need a driver's license anymore.”

She continued, "The last time I went to my doctor he examined me and asked if I had a driver's license. I said yes and handed it to him. He took scissors out of the drawer, cut the license into pieces, and threw them in the waste basket, saying, 'You won't need this anymore,' so I thanked him and left!"

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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.)