Non-QM, CD Automation, Marketing, Fulfillment AllRegs Products; FHA News and Trends

“Last week I told a joke over a Zoom meeting. It wasn’t even remotely funny.” Working remotely from home, or at least adopting a hybrid model, is something I hear about from lenders and vendors everywhere in my travels. There probably aren’t too many bankers at First Republic working from their sofas these days. Recall that First Republic, which announces earnings next Monday and continues to be mentioned by analysts despite things quieting down in the overall banking sector, received $30 billion in deposits from a group of big banks, but there was no equity. If that $30 billion is converted to equity, for example, then First Republic’s troubles are over but as it is the stock is trading at less than 20 percent of tangible book value. Those “in the know” will suggest that either a sale or a seizure is likely, probably at a discount or some set of provisions. Originating loans with 3.5% weighted average coupon in this market when you have to pay 4-4.5-5% for deposits doesn’t work very well. As one industry vet suggested, “It is a great franchise with real value. But they will have to change their lending strategy.” (Today’s podcast can be found here and is sponsored by Candor. Candor’s patented automated underwriting decision engine, CogniTech™, is a state-of-the-art, 100 percent machine platform that can handle infinite loan scenarios.)

Lender and Broker Services, Products, and Software

The library is officially open. MGIC’s new first-time homebuyer resource library is full of free educational downloads to share with borrowers, including the popular Get Ready series! Easily explain credit, how to prevent identity theft, budgeting, down payments and more. All available in English and Spanish. Designed to help you stand out as a trusted advisor. Best of all: absolutely no late fees! Browse the first-time homebuyer resource library now.

Don’t let compliance changes sneak up on you. In today’s market, when every loan matters, you can’t afford compliance errors. But keeping up with ever evolving guidelines and regulations can be a challenging job. Leveraging a tool like AllRegs® by ICE Mortgage Technology® can help you confidently navigate the complex regulatory landscape, minimize risk, and improve operational efficiency. AllRegs continuously invests in their platform to provide an easy to use and reliable way for mortgage professionals to access comprehensive federal and state regulations, as well as investor and agency guides. AllRegs industry experts regularly review and update the platform content to ensure users are informed of the latest changes. And, for those who use Encompass®, ICE Mortgage Technology released an integration that allows your team to access AllRegs within your workflow. Click here to learn more about AllRegs.

“Ready to experience next-level service? The Servbank servicing and TMS correspondent teams will be at the MBA Secondary and Capital Markets Conference in NYC May 21–24. Schedule a meeting to find out how Servbank subservicing delivers a superior customer experience as evidenced by its 99 percent customer satisfaction rate, 91 percent first-call resolution rate, 83 percent Net Prompter Score, and <1 min wait times. Along with superior service, Servbank offers unrivaled transparency for its subservicing clients using its award-winning servicing platform SIME (Servicing Intelligence Made Easy). SIME is an on demand and real time technology portal that provides complete surveillance of your portfolio. Learn how our CAREspondent’s can help close more loans with an agency-style direct credit box and full suite of renovation products. TMS leverages builder business with our up-to-180-day extended lock program and much more. It’s the duo of Servbank, a top 10 subservicer, and TMS, a top 15 correspondent buyer, which can be the partners to grow your business and ultimately, your bottom line.”

Looking to access top talent and reduce fixed costs? Overcome rising loan origination costs and adjust to fluctuations in volume by shifting to a variable cost model for processing, underwriting, and closing services. Lenders that outsource volume can save over 20% on fulfillment costs and gain the ability to be agile, scaling their fulfillment expenses in proportion to loan volume. Maxwell Fulfillment is one of the nation’s leading tech-powered onshore fulfillment providers, offering processing, underwriting, and closing talent that ensures lenders capture maximum loan volume no matter the market cycle. To learn more about Maxwell Fulfillment, click here or schedule a call today.

Many lenders’ mortgage pipelines are becoming famished after a year of diminished mortgage demand. Loan officers don’t have to waste ample time and energy hunting for buried treasure, though! With a clear lead generation strategy backed by a mortgage-specific marketing platform, lenders can identify valuable new leads in record time. Automated lead generation marketing tactics empower loan officers to succeed in a down market without making time-consuming cold calls or purchasing expensive, unreliable lead lists. Surefire℠ CRM and Mortgage Marketing Engine by Black Knight breaks it all down for you in “Mortgage Marketing Essentials: Lead Generation 101.” Download the free quick guide for proven paths to find treasure troves of high-intent leads.

AREAL.ai, the no-code automation platform for the title and mortgage ecosystem that makes it easy to reliably extract data from complex documents and integrate data with existing tools and workflows, announced the release of the Closing Disclosure Balancer Automation Tool, an AI-powered solution that allows lenders and their title agency partners to easily compare and balance Closing Disclosures to remain in full compliance with the CFPB’s TRID rules. AREAL.ai’s CD Balancer is designed to reduce the friction between industry partners with advanced software that flags every unmatching section on the Closing Disclosure, highlights any changes made and then sends the corrected data back to the various systems of record automatically. This new offering has been very well received by the industry and the company is now supporting new customers on a first come first served basis. To get on the waitlist and learn more about AREAL.ai’s CD Balancer Automation Tool, please visit here or email Bill Hajjar.

TPO Non-QM Products

“Long-term Rental or Vacation Rental? Visio Lending is the nation’s leader in Non-QM Investor DSCR loans for buy and hold SFR rentals with nearly a decade of experience and over $2.3 billion in originations. No-DTI, 30-year terms, rate buy downs, free 45-day rate locks; I/O and Sub-1 DSCR options available. Through our top-notch Broker Program, brokers are able to earn up to 2 points YSP, and 5 points total. Visio Brokers can count on a designated Account Executive and in-house processing.”

Deephaven will educate you on the importance of Non-QM at upcoming FAMP & MBA events. Deephaven continues to empower originators to close more loans using their non-QM products. Are you one of the originators adding to your volume each month closing non-QM loans? If not, make sure to schedule time to meet the Deephaven team at the FAMP Broward Gold Tradeshow and the MBA Secondary & Capital Markets conference. Keep your pipelines full, increase referrals and grow your book of business with the power of non-QM and Deephaven. Visit Deephaven at booth 203/205 at FAMP April 26th at the Fort Lauderdale Marriott Coral Springs Hotel & Convention Center. Make sure to schedule time to meet with Deephaven Mortgage during the MBA Secondary & Capital Markets Conference in New York City. The Deephaven team will be hosting meetings at the Times Square EDITION on May 22nd and May 23rd. To get approved or schedule a meeting with Deephaven, contact Tom Davis.

Ginnie, FHA, VA, USDA Program Changes

Chris Maloney with BOKF MBS writes, “The percentage of Ginnie Mae 30-year issuance compared to all 30-year issuance has averaged just shy of 30% since 1999, though that number began to increase during 2008, reaching a high of 61.7% in November of 2016. During the 2014 to 2019 period, it rose to an average of 50% each month, then it plunged to less than 30% during the QE4 Era, when the incidence of refis and purchases among the better-heeled borrower exploded higher, pivoting issuance into conventional rather than Ginnie Mae space.

“That, however, has come to an end, and now that gross issuance is dropping off and affordability is stressed, we find more borrowers are using Ginnie Mae again. Over the last year it averaged 35.6% each month, and March saw that come in at just shy of 39%. It is likely that Ginnie Mae will continue to take more market share from Fannie Mae and Freddie Mac over the near term…”

But the securities market has a slight lag, and issuance of single-family Ginnie Mae mortgage-backed securities declined significantly in the first three months of 2023, according to an Inside FHA/VA Lending ranking and analysis. Ginnie issued $75.92 billion in MBS backed by forward mortgages in the first quarter, down 22.3% from the previous three-month period. It marked the eighth consecutive quarterly decline in Ginnie activity. Both the FHA and VA programs saw significant quarterly declines. Securitization of FHA loans fell by 20.8% while the decline in VA loan volume was 24.3%. In both programs, refinance volume slowed to a trickle in the first quarter. Securitization of FHA refi loans fell 35.8% to $6.21 billion, while sales of VA refis declined a larger 39.9% to $4.99 billion.

USDA Rural Development issued a bulletin on March 28, Notice of Potential Changes to Eligible Area Maps for USDA Rural Development Housing Programs.

FHA published Mortgagee Letter (ML) 2023-08 extending COVID-19 Forbearance and HECM extension policies through May 31, 2023. This extension does not impact the recent changes made to HUD’s loss mitigation program that were announced in ML 2023-03: CORRECTED AND REPUBLISHED: Expansion of the COVID-19 Recovery Loss Mitigation Options.

FHA posted a draft Mortgagee Letter (ML) proposing changes to the Home Equity Conversion Mortgage (HECM) program and documentation requirements for the HECM Assignment Claim Type 22 submission criteria. The proposal would allow servicers to begin submitting required claim documentation for review by FHA when the mortgage reaches 97 percent of the Maximum Claim Amount (MCA), versus 97.5 percent of MCA allowed today.

FHA issued a reminder to all FHA-approved mortgagees and lenders that they must always maintain up-to-date contact information for their administrative contact(s) in the Lender Electronic Assessment Portal (LEAP). This means ensuring the administrative contact’s name, telephone number, and primary email is always current; a secondary email address is strongly encouraged. Maintaining current and accurate contact information for individuals in this role is vital since it is used for formal communication and notifications from FHA and the Department of Housing and Urban Development (HUD). Instructions for updating the administrative contact’s information in LEAP are available in Section 5.2.6 of the LEAP User Manual.

According to Press Release HUD No. 23-075, FHA is seeking feedback on guidance for accessory dwelling unit rental income policy to support the goals of increasing the stock of affordable housing and expanding opportunities for wealth building and homeowner stability. A draft Mortgagee Letter (ML), Consideration of Accessory Dwelling Unit Rental Income, was posted on FHA’s Single Family Housing Drafting Table webpage for stakeholder feedback. ADUs are an important component of the Biden/Harris Administration Housing Supply Action Plan.

FHA issued a partial temporary waiver that permits Home Equity Conversion Mortgage (HECM) mortgagees to send the original hard copy Loan Agreement and exhibits directly to Compu-Link, FHA’s HECM servicing contractor, instead of sending them directly to the jurisdictional Homeownership Center (HOC) in the FHA case binder. This change is designed to eliminate unnecessary costs and transfers of the original Loan Agreement.

AmeriHome Mortgage posted it acceptance of timeline updates provided by FHA in INFO #2023-04, which includes the incorporation of changes announced in previous Mortgagee Letters. Unless otherwise stated, these updates may be implemented immediately, but are mandatory for case numbers assigned on or after April 18, 2023. Key changes are noted in AmeriHome Announcement Number: 20230403-CL.

Capital Markets

This week, which has little in the way of market-moving data (though we will receive housing data in the form of housing starts and existing home sales), opened with the third consecutive day of selling in the bond markets. Prices down, rates up. The NAHB Housing Market Index rose to 45 in April, as expected, from 44 in March. Fed funds odds for a 25 basis points hike at the upcoming FOMC meeting increased to near 90 percent, while SOFR futures priced out more easings toward 50 basis points by year-end.

The Mortgage Bankers Association’s (MBA) monthly Loan Monitoring Survey revealed that the total number of loans now in forbearance decreased by 5 basis points from 0.60 percent of servicers’ portfolio volume in the prior month to 0.55 percent as of March 31, 2023. According to MBA’s estimate, 275k homeowners are in forbearance plans. Mortgage servicers have provided forbearance to approximately 7.8 million borrowers since March 2020. MBA’s monthly Loan Monitoring Survey, which replaced MBA’s Weekly Forbearance and Call Volume Survey in November 2021, represents 65 percent of the first-mortgage servicing market (32.7 million loans).

Today’s economic calendar began with March housing starts and building permits. Housing Starts and Building Permits were better than expected, but worse than last month: -8.5 percent (1.42 million) and -8.8 percent, respectively. The forecast was for 1.385 million starts and 1.4 million permits compared with 1.450 million and 1.550 million previously. Later today brings Redbook same store sales and a Treasury auction of $34 billion 1-year bills. Today’s lone Fed speaker sees Governor Bowman delivering remarks. Goldman Sachs, Bank of America, and Bank of New York Mellon will all report earnings today. We begin the day with Agency MBS prices roughly unchanged and the 10-year yielding 3.57 after closing yesterday at 3.59 percent.

Employment

“In the current landscape, we believe that a Loan Originator seeks out a company that places a premium on hard work while also affording ample opportunity for personal and professional advancement. At Homestead Funding, our annual President’s Club trip has been an integral tool in boosting morale, fostering teamwork, and ultimately contributing to the development of a robust and successful team! This year’s trip took qualifying LOs and a guest to St. Maarten where they got a chance to unwind, refuel, and forge stronger connections. The comradery that the trip provides creates a positive and motivated workplace environment that spans across all our branch locations. It brings out an inner drive for people to be a part of such an accomplishment each year. You can watch our President’s Club recap here. For more information about how Homestead can help you grow, contact Michele Teague today by calling 518-368-1494.”

Corporate Real Estate & Facilities Services: If you are in the market for a person who can handle your national and/or region with respect to, opening, closing, or downsizing by relocating existing office locations, here is a senior leader who has 25 years of experience with top-tier firms who can handle your corporate real estate portfolio, negotiate leases, and manage your facility needs. “Allow someone who has the experience and knowledge to take your team to new heights. Which will allow your existing sales team to focus on their expertise of originating loans, leaving this skill set to someone who has the capacity and interpersonal skills to maximize your profitability.” Please shoot me an email and I will forward you a cover letter and resume.