Oct. 5: Letters on the economy & mortgage rates, 2nd home pricing; vendor news; Saturday Spotlight: Docutech
“There was company that sold sex toys to aliens. It was SpaceXXX.” It doesn’t take “off planet technology” (yes, you heard that UFO-fan term here first!) to put out a headline. Loan officers everywhere are dealing with headlines created from news from our Federal Reserve, and subsequent sensationalist headlines talking about lower rates. But as everyone in our industry knows, mortgage rates have actually gone up since the Fed’s announcement. The U.S. economy is relatively favorable, with growth being led by the consumer. There is, however, rising delinquency in auto and credit card loans, as well as in FHA loans. Rising unemployment portends a recession, but we’re not seeing that. (More below).
Saturday Spotlight: Docutech
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“Accelerate Closings. Accelerate the Dream.” Follow Docutech on LinkedIn.
In 3-5 sentences, describe your company (when was it founded and why, what it does, where, recent growth and plans for near-term future growth).
Docutech, a member of the First American family of companies, provides an end-to-end, integrated, digital mortgage experience that enables lenders to accelerate the real estate closing process. The company digitizes and streamlines the generation, delivery, execution, perfection, and clarification of mortgage documents. Docutech sets the standard in providing market-proven technology and unrivaled customer service to the financial industry. Founded in 1991 and acquired by First American in 2020, Docutech has become a technology powerhouse, combining its innovative technology and expertise with the broad solution set and financial strength of First American.
Tell us about what type of volunteer work employees are encouraged to engage in, or charities your company supports, and why. And tell us how your company maintains its culture in a work-from-home environment, or how you plan on bringing employees back into the office, if applicable.
Docutech’s client-centric approach involves supporting the charities that our clients care deeply about. Inspired by efforts across First American, we also support our employees as they give back to the communities where we live and work. Our employees contribute their passion, time and money to dozens of food banks, charity walks, children's causes, animal rescues and more every year.
Docutech employees are deeply ingrained in the mortgage and financial technology industry and play significant roles in numerous industry groups and associations. There are also numerous learning and development opportunities internally, including First American’s Women in Leadership, SPARK, and Emerging Leaders programs. The Women in Leadership and SPARK programs are designed to develop talented women who, through their influence, have a significant impact on our company’s operations and overall success. The company’s Emerging Leader program is a hallmark leadership development initiative within First American, focusing on enhancing the skills of up-and-coming leaders from divisions and regions across the company.
Things you are most proud of that don’t have to do with sales.
Docutech recently introduced an enhancement to our Solex® suite, Solex Vision. Solex Vision’s dashboard provides lenders with enhanced, real-time visibility into their loan disclosure pipeline.
Docutech provides loan disclosures in foreign languages where required by applicable state laws and offers the translated versions of the Uniform Instruments from the GSEs to assist borrowers with limited English proficiency.
Docutech invests in ADA compliance, supporting screen readers for color blindness, and implementing responsive design upgrades that optimize viewing on any device – from cell phones and tablets to personal computers.
Is there anything else you’d like to share along these lines?
Docutech plays a leadership role in the eClosing adoption journey and the broader digital transformation taking place across both the real estate and mortgage lending industries. We are driven to simplify the complex needs for our customers and enhance the experience of the consumers they serve through innovative technologies and solutions.
As part of the First American family of companies, Docutech‘s strong culture is rooted in consistently providing the best-in-class products and services that deliver the certainty and trust needed to power seamless real estate transactions for our customers.
(For more information on having your firm’s extracurricular activities, employee growth, and your charitable side featured, contact Chrisman LLC’s Anjelica Nixt.)
Jobs numbers are driving mortgage rates
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A slow economy leads to lower rates, a strong economy to higher rates. Across every dimension, the September employment report showed a job market that was stronger than expected. Job growth exceeded expectations with a 254,000 gain for the month, and the prior two months’ data were revised upwards by a cumulative 72,000 gain. The unemployment rate dropped from 4.2% in August to 4.1% in September. Additionally, wage growth re-accelerated to 4%.
MBA SVP and Chief Economist Mike Fratantoni commented, “All of these signs point toward a successful ‘soft landing,’ but also stoke worries that inflation may not move in a straight line to the Fed’s 2% target. This report could certainly slow the expected pace of rate cuts.
“That said, while the aggregate job gains were strong, as in prior months this year, the growth was concentrated in a few industries, notably food services, health care, construction, and government hiring. Spending and hiring at restaurants and bars are potentially at risk if consumers continue to pull back on discretionary items, as some data have indicated.
“Interest rates jumped on the release of this report. MBA’s forecast is for longer-term rates, including mortgage rates, to remain within a relatively narrow range over the next year. This news will push mortgage rates to the top of that range, but we do expect that mortgage rates will stay close to 6% over the next 12 months.”
National Association of REALTORS® Chief Economist Lawrence Yun also had some thoughts. “There is no national economic recession on the horizon. The net payroll job addition in September strengthened to 254,000 after adding much lighter job gains in the previous months. The annual wage gains also accelerated to 4.0% after softening to 3.6% just two months earlier. More jobs mean more real estate demand, from retail spaces to apartment leases. Home buying will also increase, provided the conditions are right, and more inventory choices and lower mortgage rates will help.
“Even with the solid job figures, the Federal Reserve will continue to cut its short-term interest rates but with more caution. Mortgage rates, however, which are not controlled by the Fed, look to rise modestly and temporarily. This just reinforces the notion that trying to market-time the best mortgage rates can backfire. One real estate sector that is not moving forward is the office market. Jobs in professional business service and financial activities have risen by more than 2 million compared to pre-COVID days. Yet, these typically office-using jobs are not taking on office spaces. Expect, therefore, a relatively stronger housing demand in the suburbs and in fun recreation destinations.”
Industry vet James Johnson weighed in as well on the direction of mortgage rates. “The extent by which the bond market was front-running Fed Funds Rate cuts is extraordinary. The ten-year Treasury has already discounted a Funds rate at 3% to 3.5%. That is 100-150 basis points less than where Funds are today. And this is after a recent 50 basis point reduction.
“I’m sure this has happened before, but I can’t remember the market getting this far ahead of the Fed in my lifetime. In the late 1970s and early 1980s we had the Bond Vigilantes that got ahead of the Fed's raising rates. But I don’t remember front-running to the extent we are seeing today. LOs and borrowers are thinking that rates are headed straight down to 5% or 5.5%. That is not likely. If the final destination for the Funds rate is 3%, that could translate into a mortgage rate as low as 5.5%. All of that could happen, but it is quite a way away.
“Borrowers think that if the overnight fed funds rate drops 100 basis points, the 30-year fixed rate will drop by 75-100 basis points. The Funds rate could drop to 4% and mortgage rates might not drop at all. LOs will have to give borrowers a reality check on what to expect. Borrowers are talking about waiting until mortgage rates get to 5% or below to refinance. That’s a mistake, because we might not see rates at 5%, much less below that level. For mortgage rates to get to 5%, we probably need a Funds rate with a 2 something handle.” Thank you, James.
Price hit logic?
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From New Jersey, Philip S., with Burt P. Augustensen Mortgages, had some recommendations on pricing structures. “There are too many mortgage industry regulators who don’t know what the other regulators are doing.
“First, the CFPB comes in and defines Qualified Mortgages as, among other things, loans which meet the requirement that ‘total points and fees [are] less than or equal to 3% of the loan amount.’ Fine so far.
“But then, in 2022, the FHFA (in its infinite wisdom) decides to add up to 3.875 (but more commonly 3.375) loan-level points for a second/vacation home. One regulator, the CFPB, hates points and one regulator, the FHFA, loves points.
“Since lenders do not typically offer rates anywhere near high enough to offset those additional points (and if they did, they would likely not be the right option for the client), the lenders, and especially the mortgage brokers, run up against fails on the QM points and fees calculations. As a broker, our only option is to switch to borrower paid compensation and eat the overages which can be significant.
“While I agree that second home rates should be higher (compared to primary homes), going from no add-ons to investment property equivalent pricing does not seem to make sense either. Soon you will have mortgage brokers registering vacation home purchases as investment properties to avoid the points and fees test.”
Vendor morsels
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It is rare, if not impossible, to find a lender that does everything for the loan by themselves. So, vendor news is important to follow to check on the latest developments in residential lending.
Effective immediately, Advantus and Credit Plus have been removed as eligible vendors for 4506-C purposes. Both Advantus and Credit Plus were previously combined under the name Xactus. In February 2024, Xactus notified all active transcript customers to use the Xactus, LLC participant information (referenced below in this announcement) on the 4506-C form.
OptifiNow, a leading provider of innovative CRM software announced the successful deployment of its powerful platform with Arc Home LLC, a top-tier non-QM wholesale lender. Headquartered in Moorestown, New Jersey, Arc Home is recognized nationwide for its leadership in Non-QM lending, setting industry standards with exceptional customer service and competitive pricing. Among the platform’s standout features is a unique broker scoring system that automates Arc Home’s account policies, and a flexible tagging system that allows the marketing team to deploy highly targeted email campaigns with ease.
The post Document Updates: HELOC and Second Lien Security Instrument Notary Acknowledgments appeared first on Compliance.
The post Document Update: Affidavit Refinancing Exemption Made Pursuant to Section 12-108(G)(3) Of the Tax-Property Article of The Annotated Code of Maryland (Cx15803) appeared first on Compliance.
The Lender Price pricing engine for brokers provides one of the largest investor libraries, the most extensive broker user bases in the industry, and some of the best pricing available for every possible loan type. Get access to hundreds of loan programs including agency, non-agency, home equity, non-QM, DSCR, and alternative loan programs.
Simplist Technologies, the innovator behind the mortgage marketplace Simplist, announced the official launch of Sonar, the world’s first mortgage experience platform. This follows a successful beta phase with over 200 mortgage companies. Sonar seamlessly integrates loan origination system (LOS) and point-of-sale (POS) systems, providing mortgage professionals with a comprehensive, all-in-one solution to revolutionize the mortgage journey from start to finish. Key features include AI-Enhanced Efficiency, Real-Time Collaboration, White-Labeled Flexibility, and Scalable Architecture.
Dark Matter Technologies (Dark Matter®), an innovative leader in mortgage technology, announced the addition of the NOVA loan origination system (LOS) to its product lineup. Bringing the NOVA LOS under its banner alongside the Empower® LOS enables Dark Matter to offer two distinct LOS solutions and cater to a more diverse range of lender business models.
The Empower LOS is designed for lenders looking to scale by offering extensive exception-based workflows, comprehensive automation, and the flexibility to adapt to complex operational models. The NOVA LOS provides a reliable, cost-effective solution with minimal administrative overhead that is ideal for smaller lenders.
Candor Technology, a leader in mortgage technology innovation, announced the release of its groundbreaking PreQual product, a patented borrower prequalification service that leverages artificial intelligence to deliver instant results and borrower insights across conventional and FHA loans. Traditional prequalification processes are often time-consuming and cumbersome, leading to delays and inefficiencies in the mortgage lending workflow. With Candor's PreQual tool, loan officers can streamline prequal or full conditional credit approval processes and provide borrowers with near-instant decisions, transforming the mortgage lending experience for all parties involved. Key features and benefits of Candor's PreQual product include smooth integration, instantaneous results, rapid underwriting analysis, enhanced efficiency, and superior borrower experience.
Veros Real Estate Solutions (Veros®) released an announcement about its latest innovation, iVALUATION, a state-of-the-art platform that revolutionizes real estate property valuation analysis with its precision and interactive capabilities. Designed specifically for housing finance professionals, already used by major government agencies, this tool combines an advanced automated valuation model with expansive nationwide property data, making it easier to research, select comparable sales, and expedite property valuations with confidence.
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Xactus, known for verifications, is now integrated with ACES Quality Management. ACES Quality Management and Control® software helps lending institutions achieve audit efficiency across their mortgage origination, consumer lending, loan servicing and specialty lending activities. With the addition of Xactus to ACES’ network of integrated third-party verification service providers, lenders can order, track, and receive Xactus re-verification documents directly within the ACES Quality Management & Control platform to streamline the quality control (QC) audit process and eliminate errors from manual data re-entry. Xactus verification reports now available within ACES include Employment Verification, Credit Report, and Tax Transcripts.
Mobility Market Intelligence (MMI), known for data intelligence and market insight tools for the mortgage and real estate industries, announced a new feature, Refinder, to help lenders uncover refinance opportunities in their database of past borrowers. Refinder scans a loan officer’s portfolio of past loans and identifies potential refinance opportunities based on a loan’s current interest rate. The results provide key data points such as predicted monthly savings, cash out potential, current loan-to-value (LTV) and more, enabling lenders to quickly prepare and initiate refinance conversations with the borrower. Refinder also ranks and assesses the identified opportunities from best, good, moderate, or low, allowing users to easily prioritize where to begin.
VantageScore and Credit Builder’s Alliance (CBA) announced a new program that will help nonprofit lenders launch a VantageScore 4plus credit score pilot program and study its impact on increasing financial inclusion and credit access for underserved communities. The program, with support for technical assistance from JPMorganChase, will select and lead a cohort of ten CBA nonprofit members to test the VantageScore 4plus credit score that uses both credit report data and alternative open banking data to generate a more predictive credit score, especially for underserved or “thin” credit file consumers. For details, read the full announcement.
Wilqo, operator of the industry's first production optimization platform (POP), Charlie, announced its API integration with Polly, the leading provider of innovative mortgage capital markets technology and operator of the industry's first cloud-native, commercially scalable product and pricing engine (PPE). With both companies' architectures grounded in the most sophisticated and state-of-the-art cloud technologies, this highly anticipated partnership allows mutual clients to optimize operations and streamline end-user workflows across both primary components of their mortgage tech stack.
According to Maryland Property Tax §13-203(b)(1) if an individual is considered a “first-time Maryland home buyer” certain tax exemptions may apply for the rate of transfer tax. Additional information including qualification requirements for the exemption is available on Compliance.
Have you considered the potential of becoming a dual-licensed real estate agent? By offering mortgage services alongside real estate, you can guide your clients through the entire home-buying process, including the financial aspects. Realfinity’s embedded lending platform is built specifically for real estate agents and increases your commissions by around 40% per transaction, without changing your current setup. Realfinity now has originators across the nation (all dual-licensed real estate agents).
Can you believe that it has been ten years since we lost Robin Williams? Here is a short video sample of his talents, aggravating director Howard Storm. (Warning: Rated R for language; no complaints please.)
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, “Lenders and Vendors Must Pay to Play.” 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. The views and opinions in this newsletter are mine alone unless otherwise specifically stated herein.)