CRM, Lead Conversion, Marketing, AE Pipeline, MSR Financing Tools; More Mortgage M&A; CFPB News

As I type this piece on Friday morning, I am at the O’Hare aerodrome for a flight from Chicago to San Francisco. O’Hare is packed and humming… What economic slowdown? Does my opinion on the economy matter any more than yours, or… that of the guy running JPMorgan Chase? Last June CEO Jamie Dimon warned of an economic "hurricane" down the road. “Hurricane” is pretty sensationalist, especially when it hasn’t happened. This week he told Reuters that the U.S. economy was in “good shape.” It’s a safe bet that inflation will compel the Federal Open Market Committee to hike overnight interest rates above 5% (from the 4.50%-4.75% level it's at now). The Fed believes short-term rates will continue rising. If you had any questions, two Fed officials on Wednesday essentially echoed Fed Chair Jerome Powell’s hawkish opinion. Yet bond investors seem to be shrugging some of this off! If you knew that something was going to go down in price, you wouldn’t want to own it outright, right? Investors are generally piling into notes and bonds with longer maturities even in the face of increased anticipation that the Federal Reserve will substantially hike its benchmark interest rate in the coming months. Go figure! (Today’s podcast can be found here and this week’s is sponsored by SimpleNexus, an nCino company and homeownership platform unites the people, systems, and stages of the mortgage process into one seamless, end-to-end solution that spans engagement, origination, closing, and business intelligence. For today, an interview with SimpleNexus CEO, Ben Miller, on why borrower experience and technological advancements to facilitate it are so important.)

Lender and Broker Software, Products, and Services

The value of MSRs is growing and you can leverage this valuable asset to generate liquidity and unlock value. Flagstar Bank has the specialized knowledge, competitive terms and large capital base to help make that happen. Flagstar will lend on small and large MSR portfolios up to $500 million or more. And they have a complete suite of solutions to support your business including warehouse facilities and working capital facilities as well as the ability to act as subservicer for your portfolio. With Flagstar, you get the experience, commitment and attention to detail you’d expect from one of the top mortgage teams in the business. Which brings you the most valuable asset there is: peace of mind that you’ll get the successful outcome you need. Contact Jeff Neufeld or Patti Robins to discuss solutions to help your MSRs.

FinLocker has integrated with Total Expert to allow mutual clients to kick off persona-based locker invitation journeys, leveraging FinLocker content in the Total Expert platform. Use-Cases include ‘up funnel’ homebuying readiness for renters, first-time homebuyers, mortgage turn downs, and post-close customer-for-life engagement. FinLocker has already seen increased app engagement over the past year since we started using Total Expert’s to power our data-driven homeownership journeys. Once a consumer has enrolled in a lender’s FinLocker, this integration will further hydrate customer records in Total Expert with data-driven alerts, achievements, and activities to enable hyper-personalized, targeted marketing messaging throughout the homebuying journey and the opportunity to remain meaningfully engaged post-close. Mortgage lenders, banks, and credit unions interested in leveraging a private-labeled FinLocker to improve customer engagement and nurture homebuyers toward mortgage readiness can watch FinLocker’s online demo or schedule a consultation to see how they can build business for their loan officers.

Attention Wholesale Sales Managers! Do you struggle with assigning broker accounts to Account Executives? Are you worried that loans are falling through the cracks because AEs are sitting on too many accounts? OptifiNow has released Brokers onDemand, a machine learning tool that automatically balances AE pipelines and ensures that the maximum number of broker accounts are in active circulation. In today's lower volume environment, wholesale lenders need their sales teams to be as efficient as possible. OptifiNow has ready-made tools that allow you to manage your AEs smarter and capture more volume from brokers. Schedule a demo today and find out why OptifiNow is the leading CRM for wholesale lenders.

For vendors and wholesale lenders: what if you could transform every loan officer who works with you into a savvy content marketer for your products with the click of a button? “The biggest challenge most industry vendors will have in 2023 is that most mortgage companies are focused on cutting back and cutting costs,” says Gibran Nicholas, CEO of Momentifi. But what if you could turn your product, service, or initiative into a profit center for your mortgage company clients? That’s why Momentifi just launched an Enterprise Content Marketing Platform for industry vendors and wholesale lenders. It’s designed for vendors and lenders who want to get more buy-in for your products and ideas in a challenging market. Click here to learn more and get Gibran’s executive briefing, Five New Ways to Use an Enterprise Content Marketing Platform to Drive B2B and B2B2C Sales in 2023.

Conversions. Let's talk about them. Whether you're a mortgage lender at an IMB, a bank, a brokerage or a credit union, nothing is worse than finding out that a homebuyer you've invested in has chosen to finance with someone else. It's a common issue lenders face, and it directly impacts pull-through rates. So what are successful mortgage leaders doing to win the mortgage lead conversion game and position themselves for success in 2023? They’re adopting technology and strategies that keep homebuyers engaged in their ecosystem at every conversion stage. Read Positioned to Win with Mortgage Lead Conversion Optimization to learn how to identify funnel leaks, optimize at each stage, and deploy tech for ongoing results.

Today's mortgage environment is tough even for journeyman LOs with decades of experience. Two things come to mind when looking for strategies to help LOs today. First, understand home buyers in the context of uncertainty in the market today. Get back to basics of why home ownership still makes sense: pride of ownership, building equity for the future, and a better environment for their family to live and grow. Next, be able to articulate good solid strategies to make home buying more affordable, both down payment strategies and ARMs to lower payments. It’s also important to understand buyer's bias against ARMs and counter with common sense arguments. Usherpa, the number one-ranked mortgage CRM in customer satisfaction and loyalty, is offering informative and educational downloads to any loan officer who could use a hand in this challenging market.

Consumer Finance Protection Bureau

My cat Myrtle has never been a big fan of the CFPB. Insiders tell me that we should not lose track of the CFPB, and she believes “its fangs are just starting to be bared.” Recently we had news about the Townstone case (and a non-CFPB matter involving PRMI), and we can look forward to the CFPB’s funding being examined at the Supreme Court, so this year could be full of legal issues to talk about for the mortgage business.

This week we had a softball tossed to the industry in the form of the CFPB publishing the Regulatory and Reporting Overview Reference Chart for HMDA Data Collected in 2023.

But then things got complicated when the CFPB issued a RESPA related “advisory opinion” stating that some mortgage comparison sites may illegally manipulate the results. Proponents say will protect Americans from double dealing on digital mortgage comparison-shopping platforms.

Rich Horn (one of Townstone’s attorneys and former CFPB attorney) does a great job of summarizing this CFPB Advisory Opinion. ‘What is big news is that the CFPB is again interested in RESPA section 8. The CFPB has not had a public enforcement on RESPA section 8 since its legal position on RESPA section 8 in the PHH case was rejected by the D.C. Circuit in 2018…’

As attorney Brian Levy noted, “As Rich highlights, it looks like RESPA is back in the CFPB’s crosshairs again. The CFPB talks about the old HUD CLO policy in this advisory opinion which seems to seek to enable only ‘neutral’ loan comparison sites. It will take the industry some digging to analyze it closely enough to determine if everyone agrees with the CFPB’s latest RESPA interpretations (they have been very wrong about RESPA previously, e.g., PHH) but, even more importantly, this advisory opinion is silent on the question of mortgage broker compensation under RESPA, just as the RESPA FAQs failed to address the same issue back in October 2020. Mortgage brokerage compensation under RESPA has been a frequent topic in my Musings. See RESPA is a Wholesale Lot of Trouble and, after the FAQs were issued, Surely You Can’t Be Serious.

“At least insofar as we are talking about online loan comparison providers, the CFPB seems to have rejected the idea of a licensed lender to licensed lender RESPA exemption (like realtors have) in favor of this ‘neutrality’ approach. Neutrality, however, as a general rule, is inconsistent with how most mortgage brokers operate in the human context where brokers are influenced by various different pricing arrangements, services, systems and training provided by wholesalers and, at least for UWM’s brokers, exclusivity requirements.” Thank you, Brian and Rich.

Mergers, Acquisitions

Many lenders are either shrinking, expanding, being bought, or going away entirely. For those who want to continue “playing the game, “Valuing a Lender” is the current STRATMOR blog. Typically, in a union of two lenders, one is the predominant company; no one wants to be accused of a scenario of “two drunks leaning against each other in an alley to support each other.” It is a safe bet that we’ll continue to hear about deals, big and small, as the months roll on, the latest being…

American Portfolio Mortgage Corporation (APMC) and Town Square Mortgage (TSM) have announced that they have entered into a merger agreement enabling APMC and TSM to create “a significant alliance as the companies amplify their collective strengths to better serve clients, partners and employees and to drive greater opportunities for success. APMC and TSM will retain their individual names and brands. Both companies are privately held. APMC will be the surviving legal entity as the two companies come together. Benefits of the merger include combined state licenses for a total count of 36, expanded loan products and shared technology resources as led by seasoned mortgage business leaders. Paul Kessel, Scott Vorreyer, Lisa Thomas and Adam Welwood are the Board Members and Officers of the merged company.

Capital Markets

Interest rates could have further to rise to bring down inflation if it persists at the Federal Reserve's policy target, Chair Jerome Powell has warned. "I think there has been an expectation that [inflation] will go away quickly and painlessly, and I don't think that's at all guaranteed. That's not the base case," Powell says. There is evidence to support the notion of a soft economic landing in the US and, equally, evidence that weighs against it. This conflict is making asset prices all the more sensitive to Federal Reserve officials' comments and new data. "The Fed, meanwhile, needs to remain steadfast in its aim to get inflation back down to target and ensure its communications are clear. ... Whether the landing for the US economy is soft or hard, there will be plenty of turbulence on the way there," according to a Financial Times editorial.

The basic question for yesterday was, “Why did bond prices go down, and rates up?” One answer could be, “Just because prices went that way.” Another answer could be, “Because of a cruddy 30-year bond auction.” I will pick the former, but officially it was the latter. And continuing the recent hawkish sentiment, Richmond President Barkin added to the drumbeat of officials signaling the Fed has a ways to go before declaring victory. As far as rates were concerned, this week’s Primary Mortgage Market Survey from Freddie Mac saw mortgage rates increase for the first time in five weeks after last week’s central bank hikes and the strong jobs report. For the week ending February 9, the average 30-year and 15-year rates rose 3 basis points and 11 basis points versus the prior week to 6.12 percent and 5.25 percent, respectively.

This week closes out with the preliminary February Michigan sentiment, a second-tier number to be released later this morning. Aside from that, the January budget statement will be released in the afternoon, with the CBO estimating a deficit of $38 billion versus a surplus of $119 billion in the prior fiscal year. Two Fed speakers are also scheduled: Fed Governor Waller and Philadelphia President Harker. We begin Friday with Agency MBS prices worse .125 and the 10-year yielding 3.70 after closing yesterday at 3.69 percent; the 2-year is up to 4.51 percent!