Jan. 20: Financial analyst job; referral, LOS, verification tools; Experian and BMO in the headlines; STRATMOR on CX & profits; CA's Fair Plan

Most folks in our business are interested in demographics, even if it’s only 5 degrees outside. Did you know that in 1960, 1/3 of the U.S. population was 18 or younger! When lenders hear that, they think “reverse mortgages” and with good reason. Ever heard of “Peak 65”? Reverse mortgages can kick in at age 62, but there are four million people turning 65 in 2024, 2025, and 2026. That’s an average of over 11,000 people a day, every day, each of those years! What products do you have for them? Lenders and LOs have gradually shifted their focus away from traditional Fannie, Freddie, FHA, and VA loans. Many have opened reverse divisions. Manufactured housing lending is on the upswing, as are non-QM loans, hard money loans, and brokering multi-family loans. Few are hoping that mortgage rates will save them: Sticky inflation could result in the Fed pausing cuts for January and March, and December’s Jobs Report revealed the addition of 256,000 jobs, surpassing expectations. Besides, mortgage rates have gone up in recent months: expected Trump Administration policies regarding tariffs and trade policy, along with global unrest, inflation, fiscal policy, and the strength of the U.S. economy are also factors that influence interest rates. (There is no podcast today due to the holiday, but normally today’s podcast can be found here and this week’s is sponsored by Lender Toolkit's new Prism. Experience a quantum leap in accuracy and efficiency as you streamline workflows, reduce errors, and close loans faster. Prism's advanced OCR boasts 99 percent accuracy across 1,450+ document types. Effortlessly index, analyze, and underwrite crucial data with their intelligent system.)

Employment, and another loss

_________________________________________________

When asked what it takes to be a top-notch analyst, STRATMOR Senior Partner Nicole Yung says, “You must torture the numbers until they confess.” If you like to dig deep into analysis, STRATMOR Group is looking for an experienced Financial Analyst to join its team, offering a unique opportunity to work with industry-leading data and analytical tools. The ideal candidate has accounting and/or finance experience within a mortgage company, is proficient in Excel and PowerBI, and has strong modeling and analytical skills. This role, which can be remote, will support various STRATMOR data products and programs, including the Technology Insight® Study, MortgageCX, and benchmarking and valuation efforts. The full job description is available on LinkedIn. Qualified candidates should send their resume to talent@stratmorgroup.com.

The industry has lost another long-time vet. Mike Bugbee, with MIAC, passed away suddenly and unexpectedly Thursday night at home. Mike had an extensive career with GMAC/RFC, Sierra Pacific, and MIAC. Mike and I had a lot of business contact over the years, but the highlight was fishing with him on the American River. His humor and common sense will be missed.

(As a reminder, anyone searching for employment can post their resume at no charge at www.lendernews.com, and potential employers can view all resumes for several months for only $75.)

Lender and broker services, software, and products

_________________________________________________

3 reasons that LoanStream wants you to start the year with a fat pipeline! Reason #1: Up to 60 BPS Price Improvement with Select Specials (check our Rate Sheet for Select Specials on qualifying loans). 25 BPS Price Improvement on Government, Non-QM, Closed End Seconds, Purchase, Refi and Cash-Out. 37.5 BPS Price Improvement on FHA & VA with FICO 600-679. Restrictions apply. January 2025 Specials LoanStream Wholesale, Wholesale Mortgage Lending. Reason #2: The Non-QM WVOE Extension program, Professional ONE, a game changing Alt Doc Loan Solution for clients with K1 Incomes and less than 25% ownership. Allows Bank Statements vs using full documentation: Professional One Program LoanStream Wholesale - Wholesale Mortgage Lending. Reason #3: The WVOE Extension program webinar! We’ll break down who benefits from this powerful new option and how it can help you close more deals. Webinar Registration LoanStream Wholesale - Wholesale Mortgage Lending.

Lending operators and The Mortgage Collaborative members: Tired of skyrocketing verification costs? Discover how Genesee Regional Bank saves 80% on income and employment verifications with Truv in Encompass! Join Joe Leone, Group VP at Genesee Regional Bank, and Richard Grieser, VP of Marketing at Truv, on January 23, 2pm EST for a live demonstration showing how Truv’s innovative solution delivers significant savings without compromising data quality. Between 2017 and 2023, the leading provider increased prices by an astounding 141%. It’s no surprise lenders are searching for better, more affordable options. After speaking with several Truv customers at a recent The Mortgage Collaborative Conference, Joe decided to make a change. Don’t let rising costs hold you back: see how Truv can transform your verifications. Reserve your spot today!

At a luxury car dealership, each vehicle is custom-built to meet a customer's exact preferences. But sometimes, what you really need is a dependable, well-crafted car that gets the job done with efficiency and ease. NOVA LOS from Dark Matter Technologies is that feature-rich, yet highly efficient solution for lenders who need a powerful tool. The NOVA LOS combines a robust, end-to-end software platform with a cloud-hosted, browser-agnostic interface, delivering a modern user experience at every level, and is easily configured without the need for dedicated tech experts. Its modules for origination, processing, underwriting, closing, and post-closing help streamline operations and improve profitability, while customizable workflows and seamless fintech integrations offer a consistent, unified solution. With its built-in BI solution, lenders can aggregate data from the LOS along with other systems, unlocking valuable insights while avoiding the cost of additional reporting tools. For a productivity boost that’s effective, reliable, and timely to implement, give NOVA a try.

It is common knowledge that only 2-5% of purchased leads convert, but did you know that past clients and trusted referrals are more than 10x more likely to convert? So why aren’t your loan officers focused on generating higher quality and more profitable loans from the people they already know? Join OptifiNow’s webinar, “The $100k Opportunity Your Loan Officers Are Missing Out On” this Wednesday, January 22nd at 10 am PST, and learn an easy and effective way to engage with your top referral contacts that will double the production of your loan officers. Register for our webinar today and crack the code to consistent loan volume regardless of market conditions.

STRATMOR, the Customer Experience, and profits

_________________________________________________

At first blush, it’s hard to make the connection between the wine business and the mortgage industry, but according to STRATMOR Customer Experience Director Mike Seminari, there’s a strong correlation that lenders can’t afford to ignore: Just as the quality of wine depends on the soil, the strength of your mortgage business lies in the rich soil of your customer experience (CX). In our world of speed-to-revenue, we often prioritize flashy marketing and tech solutions over the more subtle yet impactful focus on our customer experience. But what if the greatest ROI lies in elevating CX? What if investing in how we serve clients could yield the strongest, most sustainable growth? Mike dives deeper into this idea in his latest CX Tip. Check out “The Case for CX ROI: Seven Ways CX Can Boost Your Bottom Line” for seven ways to invest in your customer experience that will produce financial returns in 2025.

California, insurance, the Fair Plan, and money

_________________________________________________

I would be surprised if those homes in Southern California that have burned have paid enough premiums to insurance companies to cover their loss. But there’s reinsurance, right? The insurance industry is trying to react to the ongoing disasters fueled by the impacts of climate change, and it’s getting hard. The number of homes in the wildland-urban area rose from 30 million to 44 million from 1990 to 2020. One analysis found that a number of U.S. homes (17 million homes worth 19 percent of U.S. housing) were underinsured against floods or wildfires. At the low end, the base case estimate was $1.7 trillion worth of homes in serious danger. The worst case? $2.7 trillion in losses for the insurance industry.

Lenders and servicers are attentively watching the situation in California, just as we did the fires in Lahaina and storm damage in the Southeast. There has been some question about whether California’s insurer of last resort (the FAIR Plan) has enough cash on hand to pay for its share of wildfire claims. As surplus is inadequate and reinsurance has a deductible that exceeds available cash, an industry assessment is inevitable, per Fitch. “FAIR Plan [Fair Access to Insurance Requirements Plan] doesn’t have enough surplus for this level of loss, the biggest California wildfire loss to date,” said Gerald Glombicki, senior director at Fitch Ratings in an interview with Insurance Journal.

Meanwhile, California Governor Gavin Newsom announced commitments from Bank of America, Citi, JPMorgan Chase, Wells Fargo, and U.S. Bank. They will offer mortgage relief for property owners affected by the Los Angeles area fires: a 90-day forbearance on their mortgage payments, without reporting the payments to credit reporting agencies.

Assistance the financial institutions will offer their qualified borrowers 90-day mortgage payment forbearance, relief from mortgage-related fees accrued during the forbearance period, payment option plans without immediate repayment of unpaid amounts, opportunity for additional relief, and protection from new foreclosures or evictions for at least 60 days.

The financial institutions will not report late payments of forborne amounts to credit agencies

The relief will be available for qualified customers of the institutions who reside in Los Angeles County in the following zip codes: 90019, 90041, 90049, 90066, 90265, 90272, 90290, 90402, 91001, 91104, 91106, 91107, or 93536.

The Department of Financial Protection and Innovation will also be reviewing state-chartered financial institutions to secure additional commitments in the coming days. Of course, borrowers should contact their mortgage servicer to receive relief.

SEC versus BMO on mortgage-backed securities

_________________________________________________

BMO (Bank of Montreal, the 8th largest bank in North America by assets) agreed to pay more than $40.6 million to settle allegations that its capital-markets unit failed to supervise employees who sold mortgage-backed bonds with a misleading composition, the Securities and Exchange Commission said this week.

So, what happened? Between December 2020 and May 2023, BMO sold roughly $3 billion in Agency CMO (collateralized mortgage obligation) bonds, which are backed by supposedly low-risk pools of residential mortgages and issued by government-sponsored entities Fannie Mae, Freddie Mac, and Ginnie Mae.

So far so good. But wait! BMO employees structured the bonds such that they included a sliver often $1,000 or so) of higher-interest mortgages. That portion, however, was small enough that third-party data providers’ systems generated inaccurate information about the bonds’ makeup, and BMO employees sent offering sheets with misleading metrics to customers, the SEC said.

BMO’s policies did not include guidance on the structure and sale of these bonds, the SEC found. Nor did the bank have a process for reviewing the type of information firm representatives shared with customers about the bonds or a process for reviewing bond structures against marketing communications, the agency said.

“It is critical that firms have supervisory processes that are customized to their business units,” Sanjay Wadhwa, acting director of the SEC’s division of enforcement, said in a statement Monday. “Had BMO appropriately tailored its supervision of the Agency CMO desk’s marketing of new-issue mortgage-backed securities, it might have stopped its employees from continuing to use these misleading practices.”

BMO bankers spoke about changing the bonds' "cosmetics" to boost sales, the SEC alleged. The agency’s order highlighted a complaint one market participant made to a BMO banker in June 2022 – namely, that the bank was "not selling what is advertised."

BMO’s penalty breaks down to roughly $19.4 million in disgorgement, about $2.2 million in pre-judgment interest, and a $19 million fine. The bank neither admitted nor denied wrongdoing but agreed to a censure.

Experian: uh oh

_________________________________________________

The Consumer Financial Protection Bureau (CFPB), viewed by most as “going down swinging” as it may “shift” priorities with Trump II, sued Experian, the nationwide consumer reporting agency, for unlawfully failing to properly investigate consumer disputes. The CFPB alleges that Experian does not take sufficient steps to intake, process, investigate, and notify consumers about consumer disputes, resulting in the inclusion of incorrect information on credit reports. Inaccurate or false information on consumer reports can threaten consumers’ access to credit, employment, and housing: CFPB Sues Experian for Sham Investigations of Credit Report Errors | Consumer Financial Protection Bureau.

Capital markets: markets closed for the MLK Holiday

_________________________________________________

Economic data from last week revealed that holiday sales exceeded expectations, returning to levels seen before the pandemic. Inflation for the year ended at 2.9 percent, a slight improvement from January 2024’s 3.1 percent increase. On a monthly basis, prices rose by 0.4 percent, driven by higher costs for essential goods like food and gasoline. While these figures suggest progress toward the Federal Reserve's 2 percent inflation target has stalled, they also alleviated market concerns about a worsening economic outlook.

Consumer demand has remained resilient, supported by a robust labor market, where unemployment claims continue to hover near historic lows and the unemployment rate unexpectedly dipped in December. This stability has also contributed to ongoing wage growth, which is likely to sustain consumer spending. In December, the percentage of small businesses planning to hire in the next quarter rose to 19 percent, the highest level in nearly two years. As a result, markets expect the Federal Reserve to maintain its current policy stance through at least the first half of 2025.

Looking ahead, investors will be keenly focused on President Trump’s actions as Trump II starts today. Although markets will be closed for the MLK Day holiday, trading will resume on Tuesday. Trump is reportedly preparing to issue up to 100 executive orders that could significantly impact the early stages of his presidency, adding to the uncertainty already weighing on financial markets as 2025 begins. While the precise timing of these announcements remains unclear, market participants are bracing for potential shifts in global trade and immigration policies. In the near term, the Federal Reserve is expected to keep interest rates unchanged, in line with prior guidance.

Regardless of what you think of his views, or the cause, Martin Luther King Jr.’s oratory skills demonstrated in this short video have all but disappeared from today’s leadership.

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. STRATMOR’s current blog is “Leaders Don’t Wait for Markets”. The Commentary’s podcast is live and at any place you obtain your podcasts (like Apple or Spotify).

qoɹ

(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 2025 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. The views and opinions in this newsletter are mine alone unless otherwise specifically stated herein.)