DSCR, Credit Union, Subservicer Oversight Products; News From Wholesalers; Home Point Earnings

Loan officers who’d like to learn a thing or two about the current prospecting environment are invited to listen in today at 2PM CT/noon PT as Steve Richman discusses how LO’s activities are much more important than near-term results, database management is critical, new LOs shouldn’t mind going after traditional lower-level referral partners, and the importance of making calls and working on a Friday afternoon. And while we’re on sales, and marketing, the STRATMOR Group has an upcoming virtual workshop for senior retail sales, marketing executives, and CEOs. The workshop is focused on action items and best practices for sales and marketing leaders, focusing entirely on “what is most important and relevant in today’s changing and challenging market, and along with a panel of STRATMOR experts, you’ll hear from your peers about what is working right now… Three short and interactive power packed sessions are spread over three days (Aug 23-25) so you can keep your schedule on track – plus we’ll deliver an exclusive action plan following the event to all registrants. Email Jim Cameron to learn more. Is the failure to lend in certain neighborhoods the same as avoiding lending in those neighborhoods? The recent fair lending Consent Order and state AG settlements “sticking it” to Berkshire Hathaway affiliate Trident Mortgage in Philadelphia gets a review by attorney and Mortgage Musings blogger Brian Levy. (Available here, this week’s podcast is sponsored by SimpleNexus, an nCino company and award-winning developer of mobile-first technology for the modern mortgage lender. Today’s has an interview with interview with.)

Broker and Lender Services, Programs, and Software

“Lenders everywhere are trying to squeeze out costs and streamline operations. Many are contacting us at MortgageFlex to bring their servicing operations in-house. Whether it is to move portfolios from sub-servicers or to start retaining all new originations, wouldn’t you want the most modern, nimble, cost-effective solution available? One that can get you live quickly? All supported with a SQL cloud-hosted application with the only bilingual servicing portal in the industry? We can help and have the resources to help you design and build out those new servicing teams and processes. Now is the time to keep your customers closer to home, self-servicing is the best way to do so. Please contact John McCrea, SVP, MortgageFlex, or visit us here.”

ArmorDoc leverages AI to automate document classification, data extraction and stamp/signature recognition from residential mortgage documents. The key benefits of ArmorDoc are to replace manual reviews of loan packages with automation to manage the ebbs and flows of originations and bulk transactions for a more cost-efficient, faster, and accurate streamlined pre- and post-QA process. ArmorDoc has models for FHA/VA, Conventional, DSCR, Non-QM and Reverse mortgages (both newly originated and legacy). To date, ArmorDoc has processed more than 100,000 loans through their pipeline with results greater than 97.5% accuracy and as high as 99.9%. ArmorDoc was launched by mortgage industry veteran Mike Hartman in 2020 and is 100% US based. Request ArmorDoc’s One-Pager to learn more by emailing us.”

“Do you have proper oversight over your subservicer? Richey May conducts annual subservicer oversight reviews over many subservicers to assist lenders with their monitoring and oversight responsibilities. Richey May’s program and subsequent report provide value beyond basic compliance requirements. With a focus on current and on-going procedures, the review includes interviews with all key department leaders to observe their processes and challenges, a comprehensive review of business continuity and IT assessments, a summary of the subservicer’s strategic initiatives for the future, and optional, tailored loan-level testing. Richey May’s loan-level testing digs deep into loans in your portfolio to provide valuable insights into how your portfolio is serviced. And if you’re not sure whether you should continue to retain servicing in this market, we can work with you to develop the optimal released/retained strategy. For more information on Richey May’s Subservicer Oversight Reviews, custom loan-level testing, or additional insights contact us!”

“Credit Unions that originate a member’s mortgage average seven different pieces of that member’s business. Yet they only captured 9% of the residential mortgage lending market in 2021. Worse, of members who financed their homes, 83% did so through someone else. Barriers to scale mortgage services can be overwhelming. Talent acquisition and retention are expensive. We can help. Mutual of Omaha is proud to announce the launch of Mutual of Omaha Mortgage Services, a new business channel focused on the specific needs of Credit Unions. Mutual of Omaha Mortgage Services provides Credit Unions direct access to best-in-class Marketing and Operational support, along with a full menu of mortgage products including FHA/VA and Reverse mortgages. Keep your members in the mutual family. Protect your brand by partnering with ours. Increase your fee income and benefit from our expertise and our member focused approach. Contact us.”

The rental market shows no sign of cooling off and Realtor.com® economists expect rents to grow by 7.1% in 2022. DSCR loans offer a pathway for real estate investors to get in on the action. Bring your deals, scenarios, and questions as National Mortgage Professional Magazine presents a DealDesk featuring Deephaven Mortgage’s DSCR loans, on Tuesday, August 24 at 2PM ET. Deephaven is one of the largest and oldest Non-QM investors and has purchased or originated nearly $9 billion of Non-QM loans since 2012. 80%+ of wholesalers resell through Deephaven. Deephaven has no retail. DSCR loans will allow you the ability to close more loans and separate yourself from the pack. Deephaven’s Jeremy Fraley, Sr Wholesale AE, will help you understand and navigate through Deephaven’s DSCR which offers scores down to 620, LTVs up to 80%, ability to vest in an LLC or corporation, loans up to $2M, minimum DSCR of 0.75x, and no overlays.

Wholesaler Products, News, and Events

Excelerate Capital Wholesale offers innovative lending through a full suite of products and services. From Conventional, Government and Non-QM products, including Bank Statements, Jumbo, and Foreign National programs, we make it our goal to make it easy for you, our lending partners, to meet the diverse needs of your borrowers. We are driven to provide Fast Turn Times, Friendly Service, and Flexible Qualifications. Also, look for our Bank Statements and DSCR pricing improvements coming next week! Get approved with us today, so we can help you close more loans! Contact Rachel To or Scott Gerrity sgerrity@exceleratecapital.com with your scenarios.

Hello, Sunshine State! The team at Champions Funding is heading to Orlando, FL to join the mortgage community at the Florida Association of Mortgage Professionals' (FAMP) annual convention, August 17-20th. As the sponsor of the keynote speaker luncheon, don’t miss out on the riveting discussion and banter between two outspoken political media personalities, Richard Fowler, of The Richard Fowler Show and Fox News contributor, and Lawrence Jones, Lawrence Jones, host of Cross Country and enterprise reporter for the FOX & Friends weekday franchise. Moderating this event is CEO and Founder, Evan Stone. Meet the rest of the Champs team including Kimberley Torres, Christy Mindell, Denis Kelly, Tiffany Sullivan, and the Miami-based Solutions Team. For session tickets as our guest, or to join us for a complimentary round of golf with former golf pro and Virginia Tech golf alumni, Adam Dilley; please email. Space is limited. First come, first served.

Yesterday Home Point Capital announced a second quarter 2022 net loss of $(44.4) million. Production was down 63 percent from 2021’s 2nd quarter, and down 27 percent from the 1st quarter. The numbers certainly reflect a tough environment for most wholesalers. One industry vet wrote this opinion, “Home Point’s big mistake was ramping up capacity and overhead in early 2021 in pursuit of greater market share. In order to accomplish that, it lowered margins and then found itself stuck with too much cost structure in a shrinking market.

“The real killer is pricing and margins, as is the case with most wholesalers. Since then Home Point has done a good job of reducing costs. But now HMPT is looking at a lower volume, higher margin model. Pricing is not as aggressive, and it is probably losing market share right now. I think Home Point will have costs in line by the end of Q-3-22 or sometime in Q-4-22. Then, if with less aggressive pricing, its margins widen out a bit, HMPT will be at breakeven or be profitable by year end, 2022. My prediction. UWM, for example, had net GOS over twice what HMPT had, but is still managing to pressure the other players in wholesale. It is brutal in that entire channel.”

To provide the most affordable products and services, CalHFA is reviewing all loans submitted with a MyHome for Equity Builder eligibility. Should the file qualify for Equity Builder, Mountain West Financial Wholesale will be notified to either change products (COC) or provide a Letter of Explanation signed by the borrower to keep the MyHome product. MWF suggests considering the Forgivable Equity Builder program before structuring a loan with MyHome. Complete program details (AMP) are located within BOLT.

PRMG is now offering 2-1 Seller Paid Temporary Buydowns. The Temporary Buydown option provides affordability for Borrowers in today's rising rate environment. This financing tool allows Borrowers to reduce their monthly payments in the early years of their mortgage. This option is available on Fannie Mae, Freddie Mac, FHA, VA, and USDA purchase transactions. See PRMG Product Update 22-39 for requirements for this new option.

Capital Markets

U.S. Federal Reserve policymakers said the slowdown of inflation in July is welcome news, but our central bank will need to keep pushing interest rates higher next month. Minneapolis Federal Reserve Bank President Neel Kashkari, San Francisco Fed President Mary Daly, and Chicago Fed President Charles Evans said the only unanswered question for the Fed is the size of the next rate hike. I guess size does matter.

Were the MBS and other bond markets too optimistic Wednesday? We received more soft(er) inflation data yesterday as July PPI, a key measure of U.S. producer prices, unexpectedly slipped (-0.5 percent) for the first time in more than two years. The decrease was driven by lower energy prices. The report means price pressures are beginning to ease, which may eventually slow the pace of consumer price growth. With the moderation in CPI on Wednesday and surprise drop in PPI yesterday, we have finally had some good news on inflation though the Federal Reserve looks set to keep its monetary policy tight. Wages are still rising, and that will ultimately put a floor under how much lower inflation can go.

On the rate front, this week’s Primary Mortgage Market Survey from Freddie Mac showed a reversal of last week’s plunge in fixed mortgage rates again. For the week ending August 11, the 30-year and 15-year rates rose 23-basis points and 33-basis points, respectively, versus declines of 31-basis points and 32-basis points in the prior week.

The NY Fed Desk released the MBS purchase estimate for the August 12 to September 14 period yesterday, which totaled $7.8 billion as expected, including the $17.5 billion taper. This is likely the end of QE in Agency MBS for the time being with the tapering cap doubling to $35 billion in the next period which is expected to exceed paydowns. The Desk also released a new schedule covering the August 12 to 25 period totaling $3.4 billion. There are some shifts in the weekly daily schedule, but no changes to coupons with 30-year operations targeting 4 percent through 5 percent with 15-year operations targeting 3.5 percent and 4 percent.

Today’s economic calendar kicked off with another measure of inflation: July import and export prices (-1.4 and -3.3 percent, respectively). Perhaps of more interest to the market will be the preliminary August Michigan sentiment figures due out later this morning: it closely tracks gas prices, and is viewed as “real world” data. We begin the day with Agency MBS prices are better by .125 and the 10-year yielding 2.86 after closing yesterday at 2.89 percent on the continued soft inflation news.

Jobs, Investor Wanted

The Joe Gabrione Group (JGG), a division of Celebrity Home Loans, announces the launch of JGG Marketing Studio which provides mortgage professionals with access to a best-in-class mortgage CRM, Social Media Strategies, and Lead Generation resources. JGG is headquartered in Oakbrook Terrace, Illinois and was built off a family-first culture that empowers mortgage professionals with responsible autonomy. JGG is actively hiring Branch Managers and Mortgage Loan Originators throughout the United States. “The JGG division has built an environment around taking action and creating successful daily habits that allow mortgage professionals to increase production while having the resources they need to create a positive experience for their borrowers and strategic partners. Our Executive team invests heavily into coaching and infrastructure. We doubled down on the JGG Marketing Studio to help our loan officers find better opportunities in the current market” says Division President, Joe Gabrione. For more information, please contact Dan Sulaski or 773-447-1128.

A boutique tech centered IMB, with reputable leadership and strategy to perform a retail roll up strategy, is seeking $2M investment (debt at 9%-10% return and/or equity) as an initial seed round. With achieved milestones, 2nd round institutional investors of $7-$8M have been arranged. The investor deck and plan revolve around an initial use of funds for targeted but national licensing expansion, the addition of some ops staff and subsidizing the recruiting / onboarding of new loan officers and branch managers. Target market will be middle America consumers and first-time home buyers with special underwriting emphasis on immigrants, Latinos, and African American families. To review the deck and discuss the growth plan to the first $2B in retail production, please send serious or confidential inquiries to me for forwarding.

PacRes Mortgage, formerly Pacific Residential Mortgage, is excited to announce the hiring of industry veteran Jerry Ray as Branch Development Manager. Now licensed in 35 states and growing, Paces is thrilled to have someone of Jerry’s experience and track record of success guiding their active branch expansion. “Jerry’s 20+ years focused on branch recruiting and sales leadership could simply not come to us at a more opportune time,” said Dave Bergstrom, SVP of Sales. "I'm excited to join PacRes where everyone within the organization strives for a 5-star customer experience,” said Jerry. “Sharing our company vision of, ‘Dreams Approved Daily’ for our borrowers, business leaders, and entrepreneurs that want to turn their own dreams into reality is truly a dream come true for me.” Want to join Jerry and make your dream come true? Please reach out to Dave Bergstrom, SVP at 503-210-4228.

“Benjamin Franklin said, ‘When you’re finished changing, you’re finished.’ What are you doing to keep up with 2022's changes? If you haven't already, we recommend taking a peek at Canopy Mortgage: A better business model that provides Mortgage Loan Officers with ultimate control, unmatched pricing and a proprietary Loan Origination System that promotes highly efficient loan processes and faster closings! Finally, you can give your clients better pricing AND you can make more on your deals. Canopy provides a sustainable mortgage business model that’s good for everyone. Interested in learning more? Reach out to Josh Neumarker at Canopy Mortgage for more information 888-696-9076.”