Credit, API, Sales, Repurchase Review, Subservicer Oversight Products; TransUnion Credit Study

There are a lot of topics being covered here at the MBA’s IMB conference. One of them is hedging, and if you want a primer on how lenders are protecting themselves from interest rate risk, here you go. Yesterday the MBA’s Marina Walsh observed what lenders are doing now to survive. In no order: reducing the cost of sales, revisiting existing office leases, taking advantage of predictive analytics, critically examining their business lines, ramping up new products or looking at geographic expansion, retaining servicing, further staffing adjustments, and reducing middle management. Take your pick, or do them all, but every lender is doing something as the days of raising margins to slow volume are long gone. In fact, many lenders who have retained servicing are selling it to maintain their cash flows, despite servicing income being a huge part of whatever profits were to be had in 2022. The mortgage servicing rights (MSR) market has opened 2023 with billions of dollars on the market, and more to come. (This week’s podcast is sponsored by Richey May, a recognized leader in providing specialized advisory, audit, tax, technology, and other services in the mortgage industry and in banking. Today’s has Part Two of an interview with Keller Williams Scott Agnew on navigating through uncertain times and what the industry has learned since 2008.)

Lender and Broker Software, Products, and Services

Are you looking to become an approved Chenoa Fund lender? CBC Mortgage Agency is looking to bring on new lender correspondents in every state except New York. Visit here to increase affordable and sustainable homeownership with the Chenoa Fund down payment assistance program that has helped over 40,000 borrowers purchase a home.

“Denim Social gives institutions everything they need to build a successful social selling program. Social selling is just what it sounds like: using social media to sell a product or service. It’s leveraging social to build personal relationships, showcase thought leadership, engage with prospects, interact with existing customers, and ultimately build trust that will eventually lead to sales. Not sure where to start? Our guidebook How To Launch A Social Selling Program is a great place to begin. For a mortgage-specific take on social selling, consult our guide on Helping Mortgage Loan Officers Achieve Success with Social Media Marketing. We also recommend reviewing social media trends for 2023 to help your team take advantage of timely, relevant content. In a tough market, mortgage loan officers have an opportunity to use social selling to reach the right people at the right time.”

“Close more and serve more clients with LoanStream’s 1-0 and 2-ONE Buydowns, now available on VA, and Conventional and start off the New Year with FHA and Non-QM Price Improvement specials. Plus, new brokers starting January 23rd, 2023, may be eligible for an Appraisal Credit up to $400 on two loans through February 28th, 2023. Restrictions apply, contact your Account Executive to learn more about our buydown programs and our offers, or visit us.”

“Does your subservicer oversight review simply meet the minimum compliance requirements, or does it provide you with valuable insights to identify risks and allow you to see how your subservicer is complying with new regulations and agency requirements? Richey May’s subservicer oversight reviews enable you to play a more active role in the monitoring of the servicing of your loans and take proactive action to drive true value and reduce risk 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 a long-term strategy and monitoring process. By leveraging our team of mortgage industry experts at Richey May, you will gain valuable insights that help your organization reduce risk and increase profitability. Learn more about our subservicer oversight reviews and servicing strategy deep dives.”

Not surprisingly, 2022 was an especially active year from a regulatory standpoint. The CFPB increased its supervision and enforcement activities and expanded its overall authority and focus on fair servicing and fair lending. Other notable regulatory developments in 2022 were the CFPB’s move against pay-to-pay fees, the FHFA’s announcement that servicers would be required to obtain fair lending data on loans throughout the life of the loan and Congress’ attempt to pass federal RON legislation. Read Covius Compliance Solutions’ comprehensive year-end report, featuring a summary of critical legal and regulatory actions that impacted the servicing landscape in 2022 and a preview of what’s to come in 2023.

Mortgage cycles. Down markets. Slowdowns. You can probably guess what’s next. Repurchase demands are increasing. An external third-party review might be the answer if you don’t have the resources to deal with increased demand. Consolidated Analytics offers a comprehensive repurchase review, including an advanced appraisal review for repurchase defense, buy-backs, litigation defense, tax appeals, non-performance on assets or loans, or retrospective analysis to determine whether the original appraisal was materially deficient or lacking adequate support. The CCA-AR (Consolidated Collateral Analysis – Advanced Review) is a detailed review that utilizes automated and manual processes to analyze the original appraisal to identify issues or provide support for the initial appraisal, including the subject, contract, neighborhood, site, improvements, comp selection, adjustments, and more. This approach combines data and advanced appraisal processes to deliver a cost-effective, time-saving solution to repurchase defense. Contact CA to see how CA can help.

Have you ever wondered why some people are just so difficult to communicate with? “It's almost like they live on a different planet,” says Gibran Nicholas, author of The StorySeller Adventures. “The bad news is that they actually do live on a different planet. The good news is that interplanetary travel is finally possible! The key is to connect and communicate with people in their Realm of Reality, based on their Archetype or frame of mind. That's what we're focused on in The StorySeller book and daily emails. We examine the nine most common archetypes and realms of reality in life and business. Then we share tips and ideas to get better results. Why stay frustrated or stressed out if there’s a better way?” Click here to get The StorySeller book. It’s already got great reviews and the e-book version is discounted to $1.99 this week only. You can also click here to get Gibran’s daily emails.

The world is full of iconic duos. Pairs so famous you know their names before I even finish. Peanut Butter and… Jelly. Yin and… Yang. Plug and… Play. And if you’re in the servicing biz, you know how important plug-and-play is. Black Knight has plug-and-play down to a science with a wide range of Application Programming Interfaces (APIs) that will help you reap benefits across your servicing operation. And like any good API, Black Knight’s offerings work quietly behind the scenes, so you don’t even have to think about the tech. Simply get the API connected, and you’re off to the races. Now that you know how easy it is to get started, click here to find out 5 ways Black Knight’s APIs can transform how you get business done.

Credit and Credit Report News

If you've been in the mortgage business for more than 10 minutes, you're well aware of the crucial role credit scores play in serving borrowers and getting them into loans. For years there's been little change in how to calculate credit scores. That's about to change. Savvy mortgage professionals must keep up with the new credit scoring changes to assist their borrowers in protecting their creditworthiness. Download our complimentary eBook, 2023 Credit Score Changes. What They Are and How They Will Affect Your Borrowers to learn everything you need to know about upcoming FICO™ 10T and VantageScore® 4.0 credit scoring changes and how they'll affect your borrowers. Birchwood Credit Services has provided credit reporting solutions to financial institutions for over three decades. Our proprietary bundled pricing models guarantee all add-on fees and back-end processing costs up front so there are never any additional “surprise” fees. Visit our website today.

TransUnion released a first of its kind global credit study, “Empowering Credit Inclusion: A Deeper Perspective on New-to-Credit Consumers.” The study shows that in the United States, 5.8 million consumers opened their first credit product and became new-to-credit (NTC) during 2021. And another 3.0 million became NTC through the first half of 2022. One key finding of the study: New-to-credit consumers (those consumers who are early in their credit journey) generally perform as well or better than borrowers with established credit and similar risk scores. This finding may give some assurance to lenders in both developed and developing credit markets that they can extend additional credit products to such consumers without incurring materially higher delinquencies.

Events and Webinars This Week

The MBA’s IMB is going on now but looking forward here’s a handy dandy list of events this year and state organizations. (Click on “Conferences” on the right; for any additions or corrections, contact Ed. Thank you to those who submitted additions yesterday, and those will be included.)

Register now to learn how Optimal Blue’s proven hedge advisory and analytics, innovative modeling, and customized service levels can support your organization's future success. Hedging 201: The Components of Pipeline Valuation, Wednesday, January 25 @ 1pm ET.

Know When to Hold ‘Em, Know When to Fold ‘Em, and Know When to Portfolio Your Loans. Originating to portfolio comes with its own set of risks and things to consider. Register for ACUMA’s webinar, Wednesday, January 25, at 1 p.m. CT and discover how to successfully engage in this critical strategy. Join Peter Benjamin, CMB, President of ACUMA as he sits down with Russ Brady, CMB, owner of Blue Loans LLC, to answer your questions about portfolio pricing strategies.

By 2028, the outsourcing market is set to grow 200 percent. Benefits of outsourcing peripheral tasks are clear. Discover tips for successful outsourcing strategies and how to, join SIFMA SmartBrief Webinar Thursday, January 26.

This Friday at 3PM ET is the next edition of The Mortgage Collaborative’s Rundown with Rich Swerbinsky, and me. We’ll will be covering current events in the mortgage market for 30 minutes starting at noon PT in “The Rundown with Rich and Rob”!

Capital Markets

The Federal Reserve has several missions in its charter. One of which is adding stability to the U.S. economy, and it typically carries out this mission through the Federal Open Market Committee. The FOMC is expected to slow its pace of tightening further next week by raising the target range for the federal funds rate by only 25-basis points. It’s pretty quiet out there as markets await that FOMC decision, though we learned yesterday that a $42 billion 2-year Treasury note sale met strong demand, continuing a stellar stretch of note and bond auctions, ahead of today’s $43 billion 5-year note sale and tomorrow’s $35 billion 7-year note auction.

After mortgage rates declined for the third straight week, mortgage applications increased 7.0 percent from one week earlier, according to data from the Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey. This week’s results include an adjustment for the observance of Martin Luther King, Jr. Day. Aside from the aforementioned Treasury auctions, that is today’s only economic release of note. We begin the day with Agency MBS prices better about .125 versus Tuesday evening and the 10-year yielding 3.42 (after closing yesterday at 3.47 percent) and the 2-year at 4.14.

Jobs

Evergreen Home Loans™ continues to celebrate its core convictions: family, fun, integrity, creativity, and GROWTH. The company recently announced the opening of a branch in Bellingham, WA, increasing its footprint across the Western United States. “Evergreen Home Loans is excited to join the Bellingham community,” said Robert Lipston, executive vice president, loan production. “Our team, led by Dimi Hartman, regional manager and Dylan Langei, branch manager, will continue providing top-quality service to customers in the Bellingham area." Evergreen is seeking loan officers looking to live out their personal and professional aspirations in a unique culture. If you’re a loan officer and want to work at a company dedicated to innovative products geared for your success and a place where personal and professional growth are a priority, visit the Evergreen Careers page.

#1 = STABLE ORIGINATION PLATFORM, nothing else matters for you or your customers unless you are supported by a stable origination platform. Realtors and borrowers are starting to ask more questions regarding this matter based on media headlines around recent mortgage company closures, mergers & acquisitions, lack of communication, etc. WATERSTONE MORTGAGE offers the security of a Bank-owned organization with the flexibility of an independent mortgage banker. With the ability to lend in 48 States, along with offering Bank portfolio products and only through a retail lending channel, certainly qualifies for an intelligent conversation with us. Our current initiative at WATERSTONE MORTGAGE of leaning into a market filled with adversity and identifying opportunities, will revive your energy and attitude to GROW your market share in 2023 ! Call Richard Pierce, Area Manager Western Region (602)-620-6969.

“Feeling like Bill Murray in Groundhog Day—stuck in your same old work routine? PrimeLending may be the perfect solution to jumpstart your career into a better, positive direction. Want to learn more? We’re inviting all LOs looking for a fresh start to get to know more about us at our 100 percent anonymous Strength and Stability: An Insider Look at PrimeLending webinar Thursday, Feb. 2 from 2–2:30 p.m. CST. Click here to register in advance and receive a confirmation email. During the webinar, you’ll get exclusive insights from our executive panel covering everything from our award-winning technology to our world-class operations to our powerful digital marketing and all points in between. Along the way, you’ll discover why PrimeLending has the strength and stability to be a mortgage industry leader for years to come. Questions prior to our call? Please feel free to reach out to Nic Hartke.”