Subservicer, Processing, Non-QM, Culture Building Tools; USDA, FHA Changes; Freddie's Cash Flow Product

Do you think putting together a loan is tough? How ‘bout a giant skeleton in your front yard? This dedicated individual has documented the process of his spooky creations on

Instructables. This will be super helpful for when you create a giant skeleton of your own next year or pass this along to a new homeowner that recently bought a home with your company’s help. Owners and managers of lenders and vendors wish their jobs were as easy. As their companies, small and large, do their best to contain the damage from blowing through cash reserves heading into the autumn and winter, changes are afoot. Curious about the FHA MIP? I was too, and asked Commission Gordon about it Friday; you can skip ahead to the 19:00 mark. Recall that the MBA’s Performance Report showed that the fully loaded cost to originate a loan was $10,937 in the second quarter… Did yours drop last quarter? Equifax announced that it is “the first to provide certain telecommunications (telco), pay TV and utilities attributes to the mortgage industry to help streamline the mortgage underwriting process and support loans within the secondary mortgage market.” Starting November 6 Freddie Mac will “increase homeownership opportunities by including a review of a borrower’s bank account data to identify a history of positive monthly cash flow activity as part of its technology’s loan purchase eligibility assessments.” (Today’s podcast is available here and this week’s is sponsored by EarnUp, reinventing payment and data flows in real estate ecosystems, origination, mortgage, and fintech.)

Lender and Broker Products, Services, and Software

Last month’s Emmys ceremony celebrated not only outstanding television performances, but also outstanding writing. Just as actors do their best work when they’ve got great material, mortgage advisors need great scripts to work from when reaching out to customers. That’s what makes Sales Boomerang and Mortgage Coach so essential. Working with SB+MC is like having access to cue cards 24 hours a day, 365 days a year. You’ll always know when it’s the right time to reach out to a borrower, why you’re reaching out and what you should say. Ready for the limelight? Download these award-worthy scripts today.

Reach more clients with LoanStream’s 2-1 Buydowns on Fannie and FHA loans! Primary Residences only, 30-year fixed rate. Offers borrowers a reduced rate for the first two years of their loan! Great incentive for homebuyers! Restrictions apply so talk with your Account Executive. Learn more. Not approved with LoanStream yet? Become a Broker Partner and get approved.

Hot Chicken, Country Music… And a Quicker Path to Closing with The Work Number® at MBA Annual Nashville is known for its good eats, southern hospitality, and, most recently, good whiskey, so if you’re a lender and fan of hot chicken, country music, and more closed deals, MBA Annual 2022 is the place to be October 23-26. Stop by the Equifax booth #719 to learn why The Work Number is the gold standard in helping determine loan affordability. Automated income and employment verification solutions help lenders reduce risk and avoid longer and more cumbersome mortgage loan origination processes. Equifax verification experts look forward to connecting with you one-on-one to discuss why our GSE and FCRA-compliant instant mortgage solutions work better for lenders, and borrowers, too. With access to 573 million records, The Work Number database INSTANTLY returns records, updated each pay cycle, provided directly by employers and payroll providers, so there’s no need to collect an applicant’s private banking credentials, potentially exposing them and yourself to risk. Discover how The Work Number can help speed your business and your customers through the mortgage loan process.

XINNIX is offering you a front-row seat to listen, learn and be inspired by one of the most respected and influential executives and undisputable experts on leadership in the world. Join XINNIX CEO Casey Cunningham for “Leadership Lessons from a UPS Driver: Building a Culture of We Not Me” featuring special guest Ron Wallace, former President of UPS International, on October 20 from 1-2 PM ET. What is the secret behind building not just one of the largest companies in the world but one with an undisputable culture of excellence? Ron will share his personal experience in leading what has become the World’s Largest Transportation Company in the world and what he knows are the principles that can be used by leaders in any company. Don’t delay. Register today.

“With the number of borrowers who need Non-QM options on the rise, it is more important than ever to choose the right Non-QM lender. Angel Oak remains fully committed to the Non-QM sector and with over $15B in total origination volume closed since inception, we are the clear leader in this space. Account Executives from Angel Oak Mortgage Solutions are ready and able to assist you with everything from structuring deals to helping you market Non-QM to your referral partners. In addition, please join our Deep Dive webinar series for October. You can view recordings of our “How To Find Non-QM Borrowers” or “Deep Dive Into Bank Statements” as well register for the one this Thursday on DSCR loans by clicking here. Or for more information reach out to your account executive today! Or email to learn more.”

“It’s never easy to make a change in your operation, but in the current mortgage market, now is a better time than ever to make the move to Black Knight’s innovative solutions. MBA Annual22 starts this weekend in Nashville and Black Knight will be hitting the high notes in the Music City. Our innovative, all-in-one solutions – for originations, servicing, secondary marketing or data and analytics – can help lenders retain more customers, reduce operational costs, and deliver more digital capabilities for an enhanced borrower experience. To discover why the time to invest in your business is now, schedule a meeting with Black Knight today or stop by Oak Steakhouse on Monday or Tuesday, across from the convention center.”

Attending MBA Annual in Nashville Oct. 23-26? The Maxwell team would love to meet you! Offering comprehensive solutions that address the entire mortgage process, Maxwell partners with lenders nationwide to combat today’s market challenges. To learn how our technology can help your lending team boost efficiency, reduce per-loan costs, and win more borrower business, email to set up a meeting at the event. Simply want to talk shop with our veteran team of mortgage experts? Stop by booth #519. We’d love to chat about the current market and how we’re seeing lenders pivot their strategies to find success. If you aren’t attending MBA Annual and would like to learn more about Maxwell solutions, visit our website to connect with a member of our team.

Does your subservicer oversight review simply meet compliance requirements, or does it provide you with valuable insights to improve your operation and allow you to see how your subservicer is complying with new regulations and agency requirements? Richey May’s review enables you to play a more active role in the servicing of your loans and take proactive action to drive true value for your business. 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. By leveraging the team of mortgage industry experts at Richey May, you will gain valuable insights that help your entire operation. Learn more about our subservicer oversight reviews and servicing strategy deep dives.

FHA, USDA, and VA Changes Around the Industry

FHA published Mortgagee Letter (ML) 2022-17, Consideration of Positive Rental Payment History for First-Time Homebuyers in Forward Mortgage Purchase Transactions. This ML updates FHA’s Technology Open to Approved Lenders (TOTAL) Mortgage Scorecard to include a borrower’s positive rental payment history as part of the credit risk analysis when applying for FHA-insured financing.

USDA’s Rural Housing’s August 30th announcement introduced updated USDA forms, PennyMac provided a list of these forms in Announcement 22-57: USDA Rural Housing Announces Updated Forms. Additionally, beginning October 1st funding for the USDA Rural Housing Loan Program will be temporarily unavailable. Pennymac will continue to purchase USDA Rural Housing loans with Conditional Commitments subject to the availability of commitment authority. More information is available in PennyMac Announcement 22-58: Funding for USDA Rural Housing 2023 Fiscal Year.

Citi Correspondent Lending Bulletin 2022-12 includes credit policy updates on LPA Asset Verification and ACE Appraisal Waivers. FHA Mortgagee Letter and VA Circular Updates. Non-Agency Policy Clarifications including Permanent Resident Status: Requirements for Form I-751, Vested Restricted Stock: LPA Transactions and Disability Income: Long Term vs. Short Term. Citi Correspondent Lending’s Bulletin and related manual updates were also posted to AllRegs on 9/16/22.

Pennymac announced the availability of manual underwriting on FHA loans, effective immediately. The use of manual underwriting is subject to loans first being submitted through FHA TOTAL Mortgage Scorecard utilizing DU or LPA. For more information, view Announcement 22-62: Manual Underwriting on FHA Loans.

­­­­­­AmeriHome provided notable guideline impacts as a result of these changes. The table below provides a summary of the announcement and key changes: AmeriHome provided notable guideline impacts to its USDA Program Guide to align with recent changes to Chapters 1 and 8 of the USDA HB-1-3555. A summary of USDA’s announcement and key changes are available in AmeriHome Product Announcement 20221003-CL.

The Single Family Housing Guaranteed Loan Program (SFHGLP) announced revisions to technical Handbook-1-3555, Chapter 11, Ratio Analysis. These changes became effective upon the recent issuance of Procedure Notice (PN) 570. USDA Rural Development’s bulletin Updated HB-1-3555, Chapter 11, Ratio Analysis provides highlighted revision.

U.S. Department of Agriculture (USDA) Under Secretary for Rural Development Xochitl Torres Small announced the Department is providing $4 million in loans to expand the Native American Relending Pilot program. Two Native Community Development Financial Institutions (NCDFIs) will use the loan funds to expand homeownership opportunities for Native Americans living on tribal lands in South and North Dakota. To learn more, read the full news release.

VA loans are eligible within the Non-Delegated Underwriting Program at AmeriHome. Additionally, a new Non-Delegated Documentation Preparation Service is available for approved Sellers. See AmeriHome product announcement 20221001-ND for details.

Capital Markets

Yes, our bond markets, and thus interest rates, are influenced by events overseas. A reversal of the UK’s economic plans bolstered trader sentiment to open the trading week as Britain’s new top finance official said he would speed up a tax plan to calm financial markets. That pushed bond yields down across the globe. Without much in the way of market-moving economic data this week, international news and earnings on Wall Street could drive mortgage rates.

But our inflation levels continue to serve as a backdrop. We learned last week that headline consumer inflation rose 0.4 percent in September, 0.2 percent above the average market consensus. Food prices continue to climb and were up 0.8 percent during the month. Core inflation, which excludes food and energy costs, rose 0.6 percent in September and the year-over-year rate of 6.6 percent marked a 40-year high. Retail sales were flat in September and adjusting for inflation rose 0.3 percent. While many consumers continue to spend through higher prices, consumer sentiment shows expectations for future inflation have risen. For the moment, data suggests consumers are tapping into accumulated savings and credit. Recession risks are rising, and economists are suggesting it may be in the second quarter of next year. The hope is that it will be mild with the desired amount of job loss and unemployment.

Today’s economic calendar doesn’t have any market-moving data: Redbook same store sales, September industrial production and capacity utilization, the NAHB Housing Market Index, and remarks from Atlanta Fed President Bostic and Minneapolis Fed President Kashkari. We begin the day with Agency MBS prices better by .125 and the 10-year yielding 3.98 after closing yesterday at 4.02 percent.

MLO Jobs

“We’ve all heard stories of loan officers wooed by big promises only to find those promises felt a little empty with the turn in the market. At Ross Mortgage Company we have a different approach: shoot you straight, treat you well, and provide every single loan officer with ample support and the resources needed to win more deals. We’re all in this together so if you’re a loan officer who’s tired of not receiving the support you deserve then send an email to Kevin Coleman and discover why Ross Mortgage Company really is different.”

“Sierra Pacific Mortgage (SPM) was started in 1986 and remains one of the longest standing, privately held mortgage lenders in the nation. Our organization has persevered through the ever-changing lending environment because we do not rest on laurels, but rather evolve to meet the challenges of tomorrow. As we welcome new employees onto our team, they are embraced by our family-oriented company culture and reassured that this can be a forever home like so many others in our tenured workforce who have been with SPM for 20+ years. If you are an experienced originator ready to make the move, we’re looking for passionate people that care about serving others and have a tenacity to excel in their careers. Let’s have a chat about what you’re looking for, and if it’s a fit, we’d love to have you join us. Contact our Sales Leadership team today!”