Jumbo, Broker, Performance Comparison, Internal Audit Products; Freddie and Fannie Updates

I won’t sugar coat this. Here’s some rough news for lenders and LOs: With plenty of quant jocks to slice and dice numbers, Goldman Sachs tells us that 99 percent of borrowers have a mortgage rate lower than 6 percent or the current market rate, and around 28 percent of those have rates below 3 percent. So, what are you going to do about it? A buddy and I were out to eat recently. I asked the server (in my day they were called waiters and waitresses), “Is this a bistro, a brasserie, or a gastropub?” The bearded, short-haired fellow replied, “None of those. We’re a brewpub.” Options! People have options in investing their cash, and a LO can help with financial planning. Hey, if higher rates are driving business income down, you may-as-well profit from them, even if you only have $100. If you don’t mind tying your money up for a month or more and can earn nearly 5 percent on your cash with a few keystrokes, why earn 0 percent on your bank account? Open up a TreasuryDirect account and you can buy Treasury securities with a minimum of $100. And if you’re an LO, that’s a good subject to touch base on with that client you put into that 3 percent 30-year fixed-rate loan: how to make more off of their savings. (Today’s podcast can be found here and this week is sponsored by Built Technologies: Increase efficiency, streamline processes, and improve construction and real estate financing. Built connects lenders with key stakeholders to expedite funding and provide real-time deal visibility via a cloud-based digital platform.)

Broker and Lender Products and Services

2 reasons you need risk… And an internal audit. Risk has a place in every mortgage company. Without it, you can’t grow. But exactly how much risk can you tolerate? An internal audit from Richey May can help answer that question in two important ways: 1) Know your risk appetite. Every mortgage company has a unique risk appetite. An internal audit can help you understand what yours is and how to balance risk against it. It enables you to mitigate risk to a level that lets leadership feel comfortable and still achieve business objectives. 2) Protect your licenses and agency approvals. Lenders need internal audits now more than ever, and agencies and regulators require them. Waiting until you get hit with a finding will adversely impact your business. To stay compliant, you need to adhere to regulatory requirements. Manage risk and grow your business. Talk to a Richey May expert today.

Flagstar Bank has been a major player in the mortgage space for over 35 years, and today has five times more warehouse clients than the industry average. That kind of growth doesn’t happen by accident. Instead, it’s the direct result of consistently delivering a highly personal warehouse-lending experience, in all market conditions. For example, every single client has an assigned processor – someone you have an ongoing relationship with, who knows your business, and who you can reach out directly to any time. That high level of attention is what attracts so many clients to go with, and grow with, Flagstar warehouse lending. Strength, stability and expertise is what Flagstar brings to the table. Contact Jeff Neufeld or Patti Robins to discuss what Flagstar can do for your business.

Informative Research (IR), a subsidiary of Stewart Information Services Corporation (NYSE-STC), announced the acquisition of the AccountChek® platform previously offered by FormFree. AccountChek is a digital verification of asset, income and employment service that drives insight into a consumer’s financial profile and is available to customers through multiple channels. “At Stewart, we are continually investing in our capabilities to better serve customers. We view improving consumer financial equity, including homeownership, as a key part of the work that we do, across all of our business lines,” said Fred Eppinger, Stewart CEO. “IR’s vision through the combined platform is to simplify the lending process and improve closing ratios.” The combined IR platform and AccountChek platform creates a single solution to digitally verify consumer financial data, including credit, income, employment and assets. The solution will allow customers to streamline their loan underwriting process, efficiently qualify borrowers, improve closing ratios, and expand access to mortgage credit. Learn more.

You know what numbers you did in January. But do you know what your competition did? And how you compare? Now’s your chance to find out. Mobility Market Intelligence (MMI), a top provider of mortgage data intelligence, has launched its monthly Mortgage Industry Benchmarks newsletter, which lets lenders and LOs compare their recent performance to their peers via production-based tiers. For example, the average LO produced $841K and 2.66 loans in January. For a true apples-to-apples comparison, however, LOs whose production puts them in MMI’s Diamond Tier ($50-100M production/year) would want to benchmark their performance against this group’s January average instead. FYI, if you want to know how good (or bad) the Diamond Dogs did in January, sign up for MMI's monthly newsletter and find out this, and much more, on Monday.

Broker and TPO Loan Products

When Mortgage Brokers Talk… REMN WHOLESALE Listens! New REMN pricing incentive begins today for FHA. 50 bps special for all new loan submissions with FICO equal to or greater than 720. This ONLY applies to FHA loan submissions that are submitted on or after 3/3/2023. REMN 5-DAY HELOC PROGRAM: Here’s some doubly GOOD NEWS! REMN has increased Lender Paid Comp by 100 percent for the 5-DAY HELOC PROGRAM. Yes, Lender Paid Comp has increased to 2 percent (from 1 percent). This is for all new applications effective 2/23/2023; and further compliments REMN’s recent FICO score reduction to 620 (from 640). If you’ve been searching for the premier wholesale lender with the fastest, easiest, friendliest, fully automated, 5-DAY HELOC PROGRAM, you have found REMN WHOLESALE! Click Here. REMN Wholesale is now on the Lender Price platform; partnered and accessible on the ARIVE platform (click here); and proud multi-year supporter of AIME, and multi-decade supporter of NAMB.

Quorum Federal Credit Union introduces its new Borrower Paid Broker Compensation Program. The program offers partners the opportunity to earn 1 percent borrower paid compensation (up to $5,000) on the entire line amount. There are no minimum draws and no early termination fees. Contact your Account Executive for details.  It pays to partner with Quorum. In addition, Quorum has expanded its guidelines to include up to 90 percent on a Primary Residence and 80 percent CLTV on Second Homes and Investment Properties. Quorum is also offering a 50 bp improvement to the margin on all simultaneous purchase transactions.  Ready to connect with Quorum? Contact your Quorum Account Executive, visit Quorum’s Partner Portal or email for more information.

Introducing Optima Jumbo, an all-new Jumbo product from Pennymac TPO that equips Brokers with extremely competitive pricing and puts you in position to win in the Jumbo market. The minimum loan amount is $1 above conforming limits, and when you compare Optima Jumbo against High Balance loan scenarios, in many cases, Optima will have better pricing. Available on purchases and refinances for Primary, Second Homes, and Investment Properties, plus RSU income is accepted with restrictions. Sign up to become a Pennymac TPO partner today to access our Optima Jumbo product. Also, ask us about our upcoming webinar on the state of the Jumbo market and Optima Jumbo on March 7 at 10 am PT/1 pm ET.

Freddie and Fannie News

Up market, down market, the vast majority of loans continue to be either processed and underwritten per Agency standards, or are eventually purchased by F&F, overseen by the FHFA. In a new post, FHFA is requesting input on Enterprise Single-Family Social Bond Program.

Fannie Mae updated its Selling Guide on Wednesday to include more options for property valuations, saying that they are “moving away from implying that an appraisal is a default requirement.” Those options include value acceptance (formerly appraisal waivers), value acceptance plus property data and hybrid appraisals.

Freddie Mac’s advancements in digitization and automation, you’re able to do so much more. latest Loan Product Advisor® (LPASM) release focuses on reducing your paper documentation burden to save you time and offering greater flexibility, plus new service providers for LPA asset and income modeler (AIM). Also noted are upcoming feedback message updates.

Freddie Mac Guide Bulletin 2023-5, announced the expiration of the remaining COVID-19 related underwriting requirements, effective immediately. Also announced, an update related to mortgage purchase eligibility through the flow channel.

The process of buying a home can be complicated and challenging, and many first-time buyers face obstacles, including insufficient savings or outstanding debt. Available in English and Spanish, Freddie Mac CreditSmart® Homebuyer U has helped more than 236,000 consumers prepare to become successful homeowners by focusing on key learning principles that are essential for homebuyer preparedness. Check out the new CreditSmart Housing Professionals Playbook.

Fannie Mae updated Lender Letter LL-2021-03, Impact of COVID-19 on Originations, to retire the verification of employment temporary policy and temporary eligibility requirements for purchase and refinance transactions. All standard Selling Guide policies now apply. The policy for sale of loans aged six months or less is now permanent policy and will be incorporated into the Selling Guide in a future update.

Fannie Mae recently updated its servicer toolkit, a collection of key resources that helps servicers continue to serve borrowers, to elevate coverage across three types of hardship: general financial hardship, disaster-related hardship, and COVID-19 related support.

Multifactor authentication (MFA) screens are currently visible when logging in, as MFA will soon be required to access Fannie Mae browser-based applications. After Feb. 25, the option to skip registration will no longer be available, users will be required to log in with a User ID and another form of authentication.

Strengthen your loan manufacturing process in an unpredictable market. Reduce risk and increase certainty by focusing your prefunding quality control (QC) on loans with little margin for error. This issue of Fannie Mae’s Quality Insider highlights strategies to adapt your prefunding review program to help mitigate risk in the current market.

Lenders facing market dynamics that include rising rates, higher origination costs and shrinking production volume, the last thing you need to worry about is loan quality and repurchases.

Freddie Mac dove into the data of its most effective lenders to learn how investment in smart automation can improve loan quality, provide a competitive advantage and avoid negative and costly impacts. Freddie Mac research shows that the most successful lenders implement automated solutions, regardless of the economic environment.

Capital Markets

As we trundle into March, the focus now is back on how much higher interest rates might go in the U.S. and Europe. More selling in the bond markets yesterday lifted mortgage rates and yields on the 10-year note and the 30-year bond to the highest levels since November. That was despite comments from Atlanta Fed President Bostic saying that the central bank could be in a position to pause rate hikes sometime this summer. Before we get ahead of ourselves, he did also say that he is open to revising his terminal rate range forecast higher, but has not done so yet.

While his remarks boosted sentiment, other central-bank officials in recent days have reinforced their hawkish rhetoric. Markets are pricing a peak Fed policy rate of 5.5 percent in September while some traders are betting the benchmark interest rate could rise to 6 percent. The rate hikes appeared to have quelled some of the inflation surge that inspired the policy tightening. But the notion that the Fed was too late to get started lingers, and questions are increasing over how long it will take the central bank to get back to its 2 percent inflation standard. Remember 2 percent?

Today’s data includes updates on February non-manufacturing PMIs from S&P Global and ISM. There is also a laundry list of Fed speakers: Dallas President Logan, the aforementioned Atlanta President Bostic, Governor Bowman, and Richmond President Barkin. We begin the day with Agency MBS prices better by .125 and the 10-year yielding 4.02 after closing yesterday at 4.07 percent; the 2-year is up to 4.88.

Employment and Transitions

“Rob, did I read that correctly? The job ad you posted yesterday for the #3 person at Ginnie Mae pays $141-212k per year?” Yes, you did.

“Interested in a rewarding career in housing policy? U.S. Mortgage Insurers is hiring a Senior Director of Public Policy and Government Relations to join its Washington, D.C. team. USMI is the sole trade association focused exclusively on private mortgage insurance’s unique role in the housing market and is dedicated to a housing finance system backed by private capital that enables access to mortgage credit for borrowers, while protecting taxpayers from credit risk. The Senior Director will play a leading role in designing and executing public policy strategies and will engage with policymakers, industry executives, and thought leaders on a regular basis. Join the USMI team and work to advance access to affordable, sustainable homeownership opportunities alongside results-driven policy professionals. For more information, please visit USMI’s job posting or contact us.”

“Looking for an exciting opportunity to join a fast-growing mortgage company in the Pacific Northwest region? Look no further than Ross Mortgage Company! We're expanding our presence in this thriving area and are seeking talented loan officers to join our team. As a member of our team, you'll have access to a comprehensive suite of tools and resources to help you close more loans, serve your clients more effectively, and grow your business. You'll enjoy competitive compensation, ongoing training and development opportunities, and a positive and collaborative work environment. With our reputation for excellence and our commitment to providing our loan officers with the support they need to succeed, joining Ross Mortgage Company is the perfect way to take your career to the next level. Contact VP of Sales, Kevin Coleman for a confidential conversation.”

Are you thriving or surviving? When asked how Churchill Mortgage withstands difficult times and thrives in healthy markets, COO, Matt Clarke, said, “Constantly focusing on our people.” Churchill Mortgage announced two key moves this week, with Jesse Vazquez joining the company as Vice President of Talent Acquisition and Kelly Lee being elevated to Executive Vice President of National Production. “Despite the overall cooling of the housing market, our strong foundation has enabled us to continue strategically growing and refining our workforce,” said Mike Hardwick, CEO of Churchill Mortgage. “With so many talented loan officers looking for better opportunities during uncertain times in the industry, we are thrilled to have Jesse join our team to bring talent acquisition in-house and Kelly oversee our loan officers nationwide.” Churchill is growing and would love to speak with you about opportunities in your area. Contact Jesse Vazquez or (214) 308-6177.

One person who left a large lender says it feels like “jumping from a cargo ship to a speedboat.” GO Mortgage, a Columbus, OH based lender, is being led by industry icon Mike Isaacs and a cadre of veteran leaders who have built a strong, flat organization that uses flexible credit qualifications, sensible underwriting, and competitive pricing to provide quick decisions. Productive loan officers are greatly benefiting from the comprehensive growth support found here. With conventional, government and non-QM loans, GO Mortgage has noteworthy product advantages that include construction-to-perm and a 100 percent doctor program, all offered in multiple sales channels. GO loan officers benefit from a powerful technology stack, so GO Mortgage delivers solutions that are Simple, Fast and Efficient. With strong leadership, a broad product mix and top-notch sales professionals, they are helping originators grow despite the turbulent winds. Interested to join their ranks? Reach out today!