Audit, Pre-Qual, TPO Programs, HELOC Evaluation Tools; Loan Limits and Amounts Drive Program Changes

While investors who “jumped the gun” on establishing their own conforming conventional loan limits ahead of the official proclamation at the end of November by the FHFA are wondering if they “spoke too soon” as values drop, time is rushing by. Kids are back in school, learning about Cuba and having pizza. We’re losing about 3 minutes of daylight a day. Children are picking out Halloween costumes. There are fake Christmas trees in Costco. We don’t turn back the clocks (daylight savings time in all the states except Arizona and Hawaii) for another month, November 6. Things are happening behind the scenes, and today’s Rich and Rob Rundown has Nadia Evangelou, the National Association of Realtor’s Senior Economist and Director of Forecasting, and Jim Parrott, a nonresident fellow at the Urban Institute and owner of Parrott Ryan Advisors. Topics will include FHA pricing moves, FHFA pricing moves, the FHFA on credit scoring models, forecasting the rest of ’22 and 2023, and shifts in homebuyer preferences – Millennials & Gen Z. It’s good to keep our collective eyes on the horizon because what’s under our feet is not good. According to Curinos, September 2022 funded mortgage volume decreased 57% YoY and 9% MoM. In the Retail channel, funded volume was down 61% YoY and 9% MoM. Curinos sources a statistically significant data set directly from lenders to produce these benchmark figures: more data here. (Today’s podcast is available here and this week’s is sponsored by Candor Technology, Home of the One Touch Underwrite, supporting lenders from Point of Sale to Post Close QC, to reduce repurchase risk, increase underwriter productivity by 400% and decrease turn-times by 10 days.)

Lender and Broker Products, Services, and Software

Don’t miss the chance to connect with AmeriHome Mortgage this month! AmeriHome’s Non-Delegated team will be at NAMB National 2022 in Las Vegas this weekend; connect with them at Booth #309 to learn more about the recent launches of VA loans, Closing Docs solutions, IncomeGenius® and more, or at their panel, Leveraging Resources to Build a Non-Delegated Business! Then join AmeriHome for a conversation about the economy with Freddie Mac on Wednesday, October 19th at 10 am PDT. Meet Freddie Mac expert Leonard Kiefer, Deputy Chief Economist, and explore the impacts of recent Federal Reserve monetary policy changes on the current mortgage and housing market. Be part of the discussion and ask your most important questions in our live Q&A session! Register here! And of course, AmeriHome will also be in Nashville during the MBA Annual Convention & Expo from October 23-26; schedule a meeting to learn more about how a relationship could benefit your business!

Lakeview Correspondent is pleased to announce, effective October 21st, the expansion of the popular Bayview Jumbo AUS product to include the options of a 15 year fixed rate term as well as 5/6, 7/6 and 10/6 Jumbo ARMs. Program guidelines and indicative pricing are available today on the Lakeview portal. Reach out to your Sales Contact today to learn more and while you are at it, schedule some time to meet with us in Nashville at the upcoming MBA Annual Conference this month.

Free eBook: Surviving the Remainder of 2022: How to Manage Rising Rates, Declining Volume & Challenges to Profitability. With interest rates hitting 7%, the mortgage market continues to pose serious challenges—but the truth is, it’s very possible to make money in tough markets like today’s. To dig into the challenges and opportunities that lie ahead, mortgage solutions provider Maxwell asked five experts (Serent Capital’s Amy Brandt, Richey May’s Seth Sprague, and Maxwell leaders Bryan Traeger, Anthony Ianni, and Kim Powers) for their thoughts on the rest of 2022. The result is a forward-looking game plan to help lenders best position themselves to compete in a tightening market. For expert advice on how to allocate spend, expand loan and product offerings, achieve peak efficiency, and more, don’t miss this free report (with accompanying webinar included!). Click here to download Surviving the Remainder of 2022: How to Manage Rising Rates, Declining Volume & Challenges to Profitability.

The Correspondent Lending Sales Team at Citibank N.A. is committed to helping sellers navigate this dynamic market and would be thrilled to meet with you in Nashville at the 2022 Annual MBA Conference. With still a few remaining meeting slots available, our team of industry professionals would welcome the opportunity to discuss how Citi Correspondent can assist you in facilitating your strategic imperatives. Over the past 18 months, Citi has substantially grown the Correspondent seller base, enhanced our prime Jumbo product, tailored our Non-Delegated platform to serve community lending opportunities, partnered with pricing engines to drive CRA incentives point of sale and provided innovative capital market solutions aimed at helping sellers realize higher returns while mitigating hedge risk. Please reach out to your Citi Account Executive or the National Client Services Team at CMICORRCRR@citi.com to make an appointment to hear how we can help your business thrive in 2023.

HELOC analytics solution: A lender's ability to offer HELOCs is becoming a more valuable solution with the record home equity many homeowners currently have. Members of HouseCanary’s executive team recently held an in-depth webinar to discuss HELOCs, and how HouseCanary’s HELOC solution can help lenders evaluate leads and pre-underwrite immediately with granular mortgage and property analytics. View the webinar and see if HouseCanary’s HELOC Analytics Solution is right for you.

Strength, stability, and proven performance. They’re must-haves in the mortgage space. Which is why for 35 years, Flagstar Bank has delivered them, in their size, depth of product offerings and reliably excellent service. Simply put, Flagstar is the second-largest warehouse lender in the country because its clients can count on Flagstar to come through. Every time. It has a deep bench of experienced pros and best-in-class risk management people committed to service, follow-through, and lasting relationships. A vast product offering means one-stop shopping for all your needs. And with Flagstar’s pending merger with New York Community Bank, it’ll have an even larger and more diversified balance sheet, enabling potentially higher line sizes to support your goals. Reach out to Jeff Neufeld or Patricia Robins today about consolidating your lines with a proven warehouse lender.

The Buffalo Bills lead the NFL in third-down conversions. Third downs are often the most important for offense and defense because they have the most to gain and lose. So what’s your pre-qualification to application conversion rate? Most lenders don’t even know, but they should. While many in the industry scramble to get more loans into their pipeline, the focus is on new leads. But why? There are likely pre-qualified prospects in your ecosystem just waiting to be converted! When lenders use QuickQual by LenderLogix, they see pre-qualification to application conversion rates of 60% or higher because of the value it gives to borrowers (and Realtors). Are you willing to risk losing to a last-second field goal, or would you consider shifting your strategy to secure that 7-point win? Get a sample QuickQual sent to your phone to see how it works.

“At Richey May we dig in and go deep. We have been focused on the mortgage banking industry for over 35 years. It’s where we came from and it’s what we know. This singular intent has created a full suite of services and products designed specifically for mortgage banking leaders by people who truly know the ins and outs of your operations. Our goal is to equip mortgage leaders with the best, whether that means you are utilizing our game-changing platforms or utilizing our experts as an extension of your team, so you can accomplish your goals more easily and stay ahead of the curve. From audit and tax to accounting services, cybersecurity to intelligent automation, and business intelligence, we have you covered. Contact our experts today to learn more about how we can help you reach your goals.”

Loan Limits and Amounts Changes Drive Loan Programs

It was exactly one month ago that United Wholesale Mortgage announced that “it will honor the anticipated 2023 conforming loan limits, ahead of the FHFA announcement. The maximum conforming loan limit for regular, one-unit properties will be $715,000. For special statutory provisions including AK and HI, the baseline loan limit will be 1,073,000 for regular, one-unit conventional loans.”

Other lenders and investors have loan amount-driven products and guidelines. Let’s see who’s doing what.

Fairway Wholesale Lending expanded its VA High LTV Type II Cash Out Loan product to include High Balance Loan amounts effective for loans on and after 09/21/2022, including loans in process. Refer to the VA Product Matrices & guidelines for all product information, including access to the VA Entitlement Worksheet. Access after logging into your Fairway Wholesale Lending DRIVER Account.

The required minimum loan amount for the AmeriHome Mortgage Portfolio Express program changed for new commitments taken on and after June 22, 2022 to Fannie Mae’s Conforming (General) Loan Limit +$1. AmeriHome’s Portfolio Express Program Guide and Portfolio Suite – Program Features Matrix were updated to reflect changes.

Pennymac Correspondent posted updated information regarding conventional loan limits revision to $700,000 beginning October 4th. Pennymac is recommending that Sellers confirm eligibility with their warehouse banks and mortgage insurance partners as early as possible to address any unforeseen issues. Additional details are available in Announcement 22-63: Increased Loan Limits Update.

Available now with LoanStream Mortgage, increased conforming loan limits on conventional wholesale loan products. Additionally, check out LoanStream’s Simple ITIN Qualification.

Pennymac Correspondent posted two new announcements: Announcement 22-55: NY, TX and FL Pricing Grids Added to Best Efforts Rate Sheet and Announcement 22-56: Increased VA Loan Limits Now Available.

In anticipation of conforming loan limit increases for 2023, Wells Fargo Funding added the adjuster improvements listed in Wells Fargo Funding Newsflash C22-039, allowing the pricing of certain high balance Loans as standard conforming, effective September 29, 2022.

Capital Markets

A volatile real estate market has created uncertainty for investors, lenders, and proptech companies. For a critical look at the immediate and long-term future of real estate, join HouseCanary on October 27 at 10 am PST for a discussion with Brandon Lwowski, Director of Research, and Ketan Bhalla, Head of Product, as they recap housing trends and discuss how the broader economy is impacting the real estate landscape. Click here to register.

Turning to the bond market, rates rose again yesterday in another (British) gilt-led selloff. Minneapolis Fed President Kashkari said that policymakers at the Fed "are seeing almost no evidence that underlying inflation is coming down." This week’s Primary Mortgage Market Survey from Freddie Mac saw fixed mortgage rates fall for the first time since the week ending August 18 (the 30-year rate has risen over 150-basis points since then). In the week ending October 6, the 30-year and 15-year year fixed rates fell 4-basis points and 6-basis points versus the prior week to 6.66 percent and 5.90 percent.

Noticed higher prices at the pump recently? Upsetting to the world, including the Biden Administration, OPEC is cutting production, which will drive up oil prices and make the Fed's job harder and consumer sentiment to turn even more negative as gas prices increase. Speaking of consumer sentiment, U.S. based employers announced almost 30k job cuts in September, which is up 68 percent compared to a year ago. Hiring plans are also the lowest since 2011. It would appear that the Fed's tightening is gaining traction in certain segments.

Today brought the all-important September employment report which saw September payrolls rising 263k (as expected), the unemployment rate dropped to 3.50 percent, while average hourly earnings were +.3 percent (year over year 5 percent as expected). Later this morning brings wholesale inventory figures for August, August consumer credit, and remarks from three Fed presidents (New York’s Williams, Minneapolis’ Kashkari, and Atlanta’s Bostic. We end the first week of October beginning the day with Agency MBS prices worse .125-.250 versus last night’s close and the risk-free 10-year T-note yielding 3.88 after closing yesterday at 3.83 percent after the employment data suggests that the Fed’s “medicine is working… kind of.”

Employment; IMB Wanted

National Mortgage Lender Looking to Acquire IMB! A leading privately-owned national mortgage lender is seeking to acquire a thriving IMB. The lender services $10.5 billion in loans a year and has more than 130 branches nationwide. The company is licensed in all 50 states and retains nearly 100 percent of service rights on its mortgages to Fannie, Freddie, and Ginnie Mae. The lender supports its branches with every facet of marketing, including lead generation, social media, content creation, PR, events partner programs, and more. If you’re interested in learning more, you can fill in your confidential information here.

While other mortgage companies are struggling in survival mode, PrimeLending is going strong and focused on the future! That was the primary message at the national mortgage company’s recent Sales Rally in Dallas: Coming Together. Welcoming nearly 1,000 production team members from across the country and hosting 33 recruits, the two-day action-packed event celebrated the company’s financial stability and focused on ways to grow business during unpredictable market conditions. In addition to candid panel discussions with top producers, and CEO updates from both Hilltop Holdings and PrimeLending, the event featured two nationally acclaimed keynote speakers: former Blue Angel John Foley and former Paralympic athlete Josh Sundquist. World class events like Sales Rally are just one reason PrimeLending Branch Manager and LO tenure is twice the industry average. Are you looking to secure your professional future with a company with the financial strength and stability for the long haul? Contact Nic Hartke today.