Servicing, Cybersecurity, QC, Fee Collection Tools; Investors React to FHFA Changes; Nationwide Property Listing Stat

Two hydrogen atoms meet. One says, “I've lost my electron.” The other asks, “Are you sure?” The first replies, “Yes, I'm positive.” (Yes, its cutting-edge humor like this that keeps you coming back.) Do positive thoughts matter? Houston’s Norina and Ramon Navarro think so. Thinking positive thoughts about the housing inventory in the United States probably won’t help, and I am hearing renewed stories about a lack of inventory and multiple offers at certain price points around the nation. There are only 578,000 active listings nationwide. (This is out of 142 million housing units.) Where’s the supply? Well, what do American Homes 4 Rent, Home Partners of America/Blackstone, Tricon Residential, Main Street Renewal, Progress Residential, Invitation Homes, and a smattering of others have in common? They have accumulated more than 65,000 homes in the Atlanta area alone. Thank you to DepthPR’s Kerri M. for sending along this article spelling things out titled, “The American Dream for Rent.” Given that so much of our lives are dictated by supply and demand, well, you get the picture, and many think it isn’t pretty. (Today’s podcast can be found here and this week it’s sponsored by MGIC. Since 1957, MGIC has insured more than 13.5 million mortgage loans with innovative products, tools and strategies that help customers solve problems and fuel growth. Explore tools and solutions to boost your business here. Interview with SPMB’s Ross McLaughlin on executive search firms and finding the best candidates for open positions.)

Lender and Broker Services, Products, and Software

Spring cleaning is a great opportunity to declutter and throw out things you no longer need. If you’re a lender, it might be a good time to say goodbye to some of those conference trinkets collecting dust on your desk. But be sure you aren’t inadvertently tossing the wrong things. In today’s challenging market, lenders need to save as much time and as many basis points as possible. If you’re looking for ways to maximize price and efficiency, consider simplifying your best execution without sacrificing complex decision-making. Start by downloading Optimal Blue’s free white paper, “Pool Solver: Bringing Time and Basis Points to the Secondary Market.” This resource discusses tools and strategies you can use to navigate the complexities of pooling loans and managing requirements. Download the free white paper today to learn more.

Millennial homebuyers want to pay their upfront fees online, preferably from their cell phones. Simple as that. Give them Fee Chaser by LenderLogix, a secure web-based payment solution for upfront fee collection.

What have over 250,000 MLOs and real estate agents adopted in just the past 6 months? Emerging new technology company Milestones has hit the ground running since its July 2022 Series A and go-to-market announcement. The technology is fully white-labeled and gives homeowners an all-inclusive homeownership experience including home value & equity monitoring, home maintenance reminders and how-to articles, cloud-based document storage, one-click access to hire professionals for various projects around the home, and much more. Milestones’ unique revenue model allows MLOs to double down on their commitment to client retention and maturation, while substantially lowering their tech spend (and offering more value to both homeowners and Realtor partners). Connect with Milestones’ Chief Revenue Officer, Ashley Terrell, at #NEXTSpring23 or by email, and you can learn more at milestones.ai.

Want to overcome client objections and grow your business this Spring? Reserve your seat at The StorySeller Virtual Summit on April 19. You’d benefit if, (1) you sometimes struggle to overcome objections or get buy-in for your ideas; (2) you want a more consistent way of tapping into pre-existing human desires or habits to get better results in less time; or (3) you want to grow an epic business and make a meaningful difference despite current obstacles. If that describes you and what you’re looking for, click here to learn more or sign up. Registration is free, but you and your team should reserve your spot now because seating is limited. Speakers include Gibran Nicholas, Dr. Lawrence Yun, Tim Braheem, Carl White, Hope Atuel, Mitch Anthony, Ben Miller, and Chris Voss. You can also click here to inquire about group tickets.

Exclusive data: Maxwell Q1 Quarterly Lending Report, featuring market insight from data covering $200B+ in loan volume. Want to understand the latest trends impacting today’s fast-moving mortgage market? Maxwell’s new Quarterly Mortgage Lending Report arms lenders with data that helps overcome the current sizable market challenges. Including analytics and insights from loans transacted within the Maxwell platform, this report provides market perspective based on trends over more than $200 billion in loan volume. With your free download, you'll get unique insight into loan activity, borrower trends, and forecasts from our team of tenured mortgage experts. Want a real-time view of 2023’s mortgage market? Click here to download your free copy of Maxwell’s Q1 Quarterly Lending Report.

Conversations Designed to Support Loan Quality! In this new monthly web series, Kristin Broadley, QC Ally’s Chief Innovation Officer, sits down with industry leaders to discuss how you can gain a competitive advantage through lending clarity and certainty. With conversations already available with Nanci L. Weissgold, Partner at Alston & Bird, as well as Marcia Davies, COO & Founder of mPower with MBA, the series covers what’s new and on the horizon, best practices, success stories, and tips on how to gain a competitive advantage. You won’t want to miss next month’s topic covering pricing exceptions. Sign up today.

What’s one of the biggest cybersecurity risks in mortgage lending? Loan origination, and specifically forms, because they invite fraud. Forms bring in leads and with them, personal information. On face value, those leads may seem legitimate, but what if they’re not? What if they’re encoded with malware? Whenever you collect data, you need to verify it. So first ask: Are you collecting it or is a third party doing it, and can you trust the legitimacy of each lead? Then ask: Who's holding onto that data? If it’s you, you’re liable for protecting it. Safeguard client data and your business by making an investment in cybersecurity before a breach. According to IBM’s 2022 Cost of a Data Breach Report, phishing was the costliest initial attack vector at $4.91 million. Learn how to identify and mitigate the inherent risks in processes like loan origination. Talk to Richey May’s cybersecurity experts today.

“How servicing operations experts are leading fintech innovation. Empowering exceptional operational agility with smart fintech is key to modernizing servicing, an important piece of our strategy here at Sagent. Building out the servicing ops experience of our team from the top down is high priority, and that’s why we’ve deepened our bench of industry heavyweights to include Marianne Sullivan as Chief Operating Officer, Perry Hilzendeger as EVP of Servicing, and Priya Seenath as SVP, Chief of Staff, Technology and Engineering. For more about how this shapes our roadmap, check out this 5-minute read from our CTO Uday Devalla that was recently featured in National Mortgage News.”

Lenders and Investors React to FHFA/Freddie/Fannie

No one wants unsaleable or mispriced loans in their system. And certainly everyone tries to avoid buybacks of 3 percent 30-year fixed rate loans, since selling them at 90 cents on the dollar can wipe a small lender out. So, when the Agencies say, “Jump,” everyone asks, “How high?” Given the FHFA’s delay in the DTI-related loan level price adjustments, any questions should be directed directly to the investor.

Rocket Pro TPO notified brokers, “Recently, we made loan-level pricing adjustments from the FHFA effective for new locks on or after March 6, 2023. However, due to feedback from mortgage industry stakeholders, the FHFA has delayed the effective date of the DTI ratio-based fee. We will monitor this delay and communicate a new effective date when it's determined later this year. The adjustment will automatically be removed for all floating loans and locked loans in process since the previously effective date of March 6, 2023. Reach out to your Account Executive with any questions.”

Citi Correspondent Lending announced updates to the following policies: Temporary COVID Policy/Income & VOE Requirements for Agency Transactions - Per recent Fannie Mae and Freddie Mac announcements, the remaining requirement in this topic for verification of the existence of a business within 20 business days of the note date is being eliminated and this topic is being retired. Calculation of Suspense ("Days Late") fees and the Deficiency Cure Deadline Date have been redefined. Refer to Citi Correspondent’s complete announcement, COVAgy_SuspFees_v2Mar2023, for additional details. (Previously, effective with new rate locks and commitments on / after February 14, 2023, Citi Correspondent Lending will implement the new LLPA framework announced by Fannie Mae and Freddie Mac on January 19, 2023. Citi Correspondent also issued reminders in its 2/14 Purchase Moratorium, Temporary Buy Downs & 4506-C Version Deadline.)

Citizens Correspondent posted Conventional Agency DTI LLPA update in Bulletin 2023-07.

The FHFA announced on March 15 a delay to the implementation date of the DTI (ratio-based) fee until August 1, 2023. As a result of this announcement, PRMG will be updating its DTI adjust with locks taken effective March 16, 2023 to reflect a 0.000 fee.

Penny Mac recent announcements include 23-13: Fannie Mae SEL 2023-01 Cash-Out Refinance Eligibility and 23-14: Updates to Fannie Mae and Freddie Mac LLPA Changes.

PennyMac posted information on the update to FHFA Debt to Income LLPA in announcement 23-21.

On March 15, FHFA announced a delay to the implementation date of the DTI ratio-based fee until August 1, 2023. As a result, per PennyMac Announcement 23-20, Pennymac will update the Best Effort rate sheet effective for all Best Effort Commitments taken on or after Thursday, March 16, 2023 as follows: Update the “DTI > 40%” LLPA to a zero value.

Pennymac Correspondent posted Announcement 23-16 Conventional LLPA Waiver Update and Announcement 23-17 VA Circular 26-23-06 Funding Fee Charge Update.

Fifth Third Correspondent Lending Communiqué 2022-1-2.17.23, covers loan seasoning requirements on Agency Products, 4506-C Reminder, and Ineligible Condo Project List.

Fannie Mae published SEL-2023-01 announcing multiple Selling Guide changes, including updates to cash-out refinance eligibility requirements. AmeriHome Product Announcement 20230210-CL outline impacts on AmeriHome guidelines as a result of these changes.

On February 15, 2023, Fannie Mae and Freddie Mac announced the expiration of the remaining temporary COVID-19 related requirements effective immediately. AmeriHome accepted these changes in the provided Fannie Mae and Freddie Mac timeline. See AmeriHome Mortgage Correspondent Product Announcement 20230207-CL for details.

AmeriHome announced the expansion of its offering of Agency eligible Temporary Buydowns. 3-2-1 and 1-1 Temporary Buydowns are now available, which are in addition to the currently offered 2-1 and 1-0 Temporary Buydown types. For details, see AmeriHome Product Announcement 20230213-CL.

AmeriHome General Announcement 20230214-CL summarizes previously published changes made during February, additional changes made with the announcement, and recent Agency and regulatory news.

Black, Mann & Graham LLP shared a memorandum regarding Fannie Mae’s new seasoning requirement for cash-out announcement on February 1, 2023.

As you plan for the new Fannie Mae® and Freddie Mac LLPAs previously effective May 1, 2023, but now delayed, Plaza Home Mortgage put together a helpful LLPA Reference Guide to show you the areas where new price adjustments are more restrictive or more beneficial.

Capital Markets

Following the conclusion of yesterday’s testimonies from Fed Vice Chair for Supervision Barr and FDIC Chair Gurenberg before the Senate Banking Committee on the recently failed banks, the yield curve flattened on concerns the FDIC could decide to liquidate the failed banks securities holdings, which are mostly MBS. That is not good news for lenders who produce loans that go into securities backed by mortgages.

In terms of economic releases, the Conference Board's Consumer Confidence Index for March beat expectations, even though the survey period covered the week after Silicon Valley Bank collapsed. The S&P Case-Shiller Home Price Index was up 2.5 percent year-over-year in January after being up 4.6 percent in December. The FHFA Housing Price Index rose 0.2 percent in January after decreasing 0.1 percent in December.

Today’s economic calendar kicked off with mortgage applications from MBA, which increased 2.9 percent from one week earlier. Later this morning brings the Pending Home Sales Index for February, a Treasury auction of $35 billion 7-year notes, and remarks from Fed Vice Chair for Supervision Barr. We begin the day with Agency MBS prices are unchanged from Tuesday and the 10-year yielding 3.56 after closing yesterday at 3.56 percent. (The 2-year is at 4.06.)

Jobs and Legal Transitions

“2023 is looking to be another year of AmWest Funding proving to be a staple among the nation's top Non-QM lenders! As a result, we are excited to announce that AmWest Funding is seeking Delegated Correspondent Account Executives and Lenders to partner with. AmWest Funding is committed to providing its Partners with a variety of product options to meet their unique scenarios. As an AmWest Partner, you will gain full access to a wide product selection of VOE/P&L, Asset Qualification, Bank Statement, One Year Tax Return, and DSCR programs; each competitively priced to beat the current market and offer borrowers additional options to finance their homes. When you choose to work with AmWest, you'll be supported by an experienced team that has been thriving in mortgage lending since 1995. To join our team, contact us or visit our website for more career opportunities. Lenders may apply here.”

Garris Horn LLP, a national law firm serving the financial services industry, has added litigation attorney James Brody and seasoned colleague Ingrid Petersen as partners. Congratulations!