POS, Lead Conversion Tools; Important FHFA, Freddie, Fannie ARM and LLPA Changes Coming Soon
What does someone look like when they started working in our business at age 15? Well, there’s always this interview last week with Robbie Chrisman (yes, RCIII) about how he started his mortgage podcast and the potential influx of youth versus the 60- to 70-somethings. Yes, the industry continues to evolve, and not always in good ways. Every lender out there is coming to grips with the upcoming conventional conforming loan-level pricing adjustments hitting cash out refis. (Fannie Mae, Freddie Mac.) Those who take the time to compare have noticed that the cost of a cash out refi is increasing, except for credit scores of 640 and below with an 80% LTV and any LTV with a score of 620<. Put another way, the FHFA is rewarding low credit score borrowers that need cash out. Cash out LLPAs are worsening depending on the LTV/FICO but there are some categories that are improving, but those are generally lower FICO and higher LTV and represent a small percentage of cash out business. More conventional conforming news below. (Today’s podcast is coming from 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 percent, and decrease turn-times by 10 days.
Lender and Broker Software, Services, and Products
When “Take Me Out to the Ball Game” was written in 1908, America’s pastime looked a little different. For example, while prevalent at the turn of the century, triples now account for just 2% of all hits in baseball. Watermark Home Loans is bringing the triple back by tripling its average mortgage originator production compared to industry norms. How? By adding Sales Boomerang and Mortgage Coach, the industry’s #1 borrower intelligence platform, to the lineup. With Sales Boomerang and Mortgage Coach, Watermark is winning big while turning customers into lifelong fans that know they can count on Watermark for competitive rates and trusted mortgage advice now and in the future. Download the free case study today and start hitting your own triples.
Somewhere along the way, we let Silicon Valley convince us that we needed to buy a second loan origination system and call it a point-of-sale. So instead of having one expensive system that we have to train everyone on, now we have two. When you partner with LenderLogix, you can get all of the benefits of a point-of-sale within Encompass® by ICE Mortgage Technology™ without the bloat. With LenderLogix’s POS, you can give your borrowers the amazing front-end experience they expect at a fraction of the cost. Head over to their site, and you can be up and running in a week.
Freddie Fannie, Conventional Conforming Changes
Following the adoption by the Federal Reserve Board of a final rule under the Adjustable Interest Rate (LIBOR) Act, Fannie Mae and Freddie Mac have announced replacement indices for their legacy London Interbank Offered Rate (LIBOR)-based loans and securities. For single family mortgage loans and related mortgage-backed securities, as expected, Fannie Mae and Freddie Mac have selected the relevant tenor of the spread adjusted CME Term Secured Overnight Financing Rate (SOFR). The transition to the replacement indices will occur the day after June 30, 2023.
To reiterate, following the Federal Reserve Board’s publication of the final rule pursuant to the Adjustable Interest Rate (LIBOR) Act of 2021, the GSE’s announced transition to Replacement Rates for Legacy LIBOR Contracts. The transitions will occur the day after June 30, 2023, the last date on which ICE Benchmark Administration Limited will publish a representative rate for all remaining tenors of USD LIBOR. Details can be viewed in the respective GSE announcement: Fannie Mae replacement indices for the legacy LIBOR loans and securities announcement; Freddie Mac’s transition of its legacy USD LIBOR-indexed contracts announcement.
The FHFA, overseer of Freddie and Fannie, published its final rule on new Enterprise products and activities. Per the MBA, the final rule is largely similar to the proposed rule which was published back in November 2020. The final rule requires Fannie Mae and Freddie Mac to provide advance notice to FHFA of new activities and obtain prior approval before launching new products. MBA previously submitted written comments to FHFA in response to the NPR which were generally supportive of the proposal. MBA offered technical recommendations and emphasized the importance of innovation along with the need for transparency, efficiency, and the protection of proprietary information. FHFA addressed some of these topics in the final rule. This final rule will replace the interim final rule that has been in place since July, 2009 and will be effective 60 days from the date it is published in the Federal Register. Additional details can be found in FHFA's fact sheet.
In January, Fannie Mae will begin implementing multifactor authentication with its lenders to enhance data security. To find out more, contact your Fannie Mae Administrator or call the Fannie Mae Technology Support Center at 800-2FANNIE (800-232-6643) with any questions.
U.S. Mortgage Insurers (USMI), the association representing the nation’s leading private mortgage insurance (MI) companies, issued a statement on FHFA’s Final Rule for New Enterprise Products and Activities, which will replace the 2009 Interim Final Rule that established a process for the government-sponsored enterprises (“GSEs” or “Enterprises”) to obtain prior approval for new products and provide notice for new activities.
The Fannie Mae December Servicing Guide update SVC-2022-08 aligns the property, flood, and project insurance requirements with updates in the Selling Guide; clarifies compensatory fees for delinquency status reporting; makes updates related to allowable foreclosure attorney fees and costs; and includes miscellaneous updates.
National MI updated the TrueGuide® which includes the following changes and clarifications, Adoption of GSE Loan Amount Increases, Pricing Using DTI Excluding the Mortgage Insurance Premium, and Miscellaneous Guideline Updates, effective January 3, 2023, unless otherwise noted in National MI Announcement UW 2022-07.
Clarification
Yesterday the commentary noted, “A&D Mortgage is launching new temporary rate buydown programs to provide borrowers with more flexibility when it comes to their home financing options.” Readers should know that the buydown program does not include FHA loans, but includes owner-occupied Conventional, Non-QM loans, with third-party or seller-paid options as well.
Capital Markets
I know you’re probably busy, and there isn’t much going on in the bond market, so I won’t waste your time with filler. The yield curve steepened yesterday (helping ARM rates compared to 30-year fixed rates) on no real news, though we did see the November Pending Home Sales report missed expectations by a wide margin. There was a muted reaction to the day's $43 billion 5-year note offering, which met lukewarm demand ahead of today's sale of 7-year notes.
Weekly jobless claims kicked off today’s economic calendar. Initial claims (225k: steady, and not pointing toward a recession) with continued claims (1.71 million, as expected). Later this morning brings Freddie Mac’s Primary Mortgage Market Survey and the aforementioned Treasury auction of $35 billion 7-year notes. Yesterday the risk-free U.S. 10-year T-note closed yielding 3.89 percent and this morning we start with it at 3.87 and Agency MBS prices are unchanged compared to last night.
Employment
Nations Direct Mortgage is excited to announce a key addition to its senior leadership team. Industry veteran Jack O'Brien has joined Nations Direct as its SVP, National Sales Director. “We’re beyond thrilled to welcome Jack and his talented sales and ops teams to Nations Direct” states Aimee Quinn, President. “His extensive experience in sales, operations, and product development will be a key factor in growing our team and expanding our national footprint. While other lenders are experiencing volume reductions, NDM is growing!” Jack O'Brien previously held the title of Vice President, Eastern Divisional Sales Manager for Loan Depot Wholesale. He was instrumental in growing LD Wholesale from the ground up in 2014. Mr. O'Brien's extensive resume includes Vice President positions at Fifth Third Bank Wholesale and National City Home Equity. He has a tremendous following of top-notch Account Executives.
“Start 2023 off right by accelerating your business, full speed ahead. Guaranteed Rate Affinity is all about embodying our core value: ‘Grow for Good,’ which means kindness is at the core of every decision we make, with positivity lighting the way. With our passion for excellence, combined with our tech tools and team-based approach, you’ll be able to grow your business like never before to achieve your goals for the New Year. Our dedicated support team will work with you to develop winning strategies to maximize your personal and professional potential. This is why Guaranteed Rate Companies has the most originators on the Scotsman Guide Top Originators List for the tenth year in a row. Join us, because it's more than just a place to work… It’s a haven for success and growth. Learn more about opportunities and year market. (Source: Based on the Scatman Guide 2021 Loan Originators List.)”
“Thrive Mortgage did it again! Despite the challenges in our industry, we have remained financially strong, nimble, determined, innovative, and committed to our purpose. These traits enable Thrive Mortgage to have the best model in any market condition for both our colleagues and our clients. Reflecting on 2022, we are so proud to have attracted so many new regional and local teams from all across the country, while also completing the acquisition of AMSCo (American Mortgage Service Company) in 90 days. Additionally, we are so proud of our tenured professionals who have been with us over the last twenty-plus years. Our confidence remains strong because of the heart of our amazing community who thrives together and continues to be a driving force for moving our industry forward. We wish all our families, partners, and fellow servant-leaders in the industry a very Happy New Year! We would love the opportunity to share our story with you!”
In the Northwest and California, Banner Bank is searching for Mortgage Loan Officers looking to create lasting Realtor and builder relationships at a bank focused on the market today. Banner has opportunities for lenders looking for local decision making with FHA, VA, USDA, state bond and true Portfolio lending opportunities along with servicing retained Fannie and Freddie loans to assist in client retention. Additional highlighted products cover CRA lending with private label no payment down payment assistance to help assist all borrowers with the right opportunity. Banner is the right fit for an established team or the individual looking to grow their business and take the next step in their career. Please send resume to Aaron Miller.
Wanna earn $100k a year being “an integral part of dynamic teams that help make affordable and sustainable housing solutions available to millions of low- to moderate-income individuals and families each year? The FHA needs to fill this vacancy within its Office of Single Family Housing.