Productivity, Non-QM, CRM, Automation Products; ChatGPT, AI, and the Mortgage Industry

Amidst the seemingly week mass shootings and violence, individual deaths stand out. Heartfelt condolences go out to Jennifer and Dan Gilbert, of Rocket Mortgage, over the death of their 26 year old son Nick. No parent should have to deal with the death of their child and going through the grieving process. Meanwhile, UWM’s Mat Ishbia was involved in a play during the NBA playoffs. When I was a kid, my grandmother (Edna, and the source of several of my passwords) came to live with us. When you’re 10, sharing a bathroom with an 80-year-old is, uh, memorable, for lack of a better term. But I survived, and so did she (for several years, at least) after the arrangement had ended and she moved to a retirement home. Now, many years later, the dynamics of multigenerational households are shifting. “Historically, these households entailed young adults moving back in with their parents, or aging parents moving in with their adult children. Now, a growing number of parents are moving in with their young adult children and doing so at a younger age, while still healthy and employed.” Frankly, I personally don’t see a lot of upside in that, but what do I know? (Today’s podcast can be found here and this week’s is sponsored by SimpleNexus, an nCino company and the homeownership platform that unites the people, systems, and stages of the mortgage process into one seamless, end-to-end solution. Listen to an interview with Polunsky Beitel Green's Marty Green on the Fed’s rate hike last week and what it means for borrowers and homeowners.

Lender and Broker Software, Services, and Products

Artificial intelligence (AI) and machine learning (ML) are reshaping the world around us – and mortgage servicing is no exception. But how should you be implementing AI and ML into your operations? This question is common, but the answer isn’t always simple. To start, AI isn’t appropriate for every business challenge, so it’s critical to clearly define the pain points you’re trying to solve. It’s also important to recognize that AI isn’t a one-and-done solution; without a steady stream of new data, AI models can quickly become irrelevant. If you’re considering incorporating AI into your business, check out Black Knight’s blog post, “3 Keys to Successfully Applying AI/ML to Servicing Operations.”

Are there gaps in your employees’ skill set you wish you could address to get the most out of your existing workforce? What are the pain points preventing your team from reaching their full potential? TMCU wants to know! Its carefully crafted training content is designed to meet real-world training and education needs from mortgage executives just like you. Complete the survey by May 18th and express your ideas for the next round of course development. Each respondent will be automatically entered to win one of three prizes: a $200 Amazon Gift Card, a personalized Yeti® mug or an assortment of Cheryl’s Cookies! Winners will be notified via email by May 19. In the meantime, check out TMCU’s existing library of super-affordable courses to begin improving your team’s skill set today.

Fourteen days and counting to MBA's Secondary and Capital Markets Conference & Expo. The Computershare Loan Services (CLS) team is excited to gather with industry friends, colleagues, and clients in the Big Apple. "Nothing beats in-person meetings. Our team takes great care to listen, understand our client's needs, and build long-term relationships," says Randy Lightbody, Chief Revenue Officer. Contact Randy and the team at Computershare Loan Services to set up a meeting time in New York and learn how CLS' full range of solutions, from origination fulfillment services to sub-servicing, help your organization stay one step ahead.

Work Hard Easier. Here's how to work less and win more in this tough market. Your first instinct may be to work even harder than you have been. But instead, you should focus your energy on the essential tasks: making one-to-one phone calls, having face-to-face meetings, and personalizing your marketing with video content. Automate tasks like prospect follow-up, loan in-process updates, Realtor, and past customer outreach, thank you cards and closing gifts, etc. Set up automated social media posts also. A truly easy SmartCRM system will do all this and more. Take a look at Usherpa's Relationship Engagement Platform, ranked number one in customer service and client loyalty in the mortgage business. Download this free Field Guide to Success and see how easy delegation can be.

Exciting News for Your Pipeline! Spring Specials from LoanStream have been extended on Government and Non-QM. Contact your AE to get the scoop! Restrictions apply and Specials are only here for a limited time. Interested in reaching more clients? Join the next webinar coming up on Closed End Seconds, CalHFA and MaxONE DPA programs to unlock the knowledge you may need to establish a steady pipeline this Spring into Summer. Reserve your spot for you and or your entire team.

RPA, BPA, AI = efficient, effective productivity from your team members, and improves the quality of work life. Service 1st is focused on RPA solutions for clients as volumes greatly fluctuate for the next 8-12 months. S1’s Income+ rules engine aids underwriters and processors in eliminating repetitive tasks for determination of final borrower income. A cost-effective bolt on to existing VOE & TRV processes, Income+ will not break nor require large scale re-engineering for income determination processes. Loan manufacturing never stops with S1 cascades. Choose from our automation library, including VOE, AVM and credit. Outsource repetitive processes to our volume specialists. Try our monthly time calculator and visualize the time/cost savings. There are many reasons we’re Service First. Click here to contact S1.

AI, ChatGPT, and James Cameron?

Artificial intelligence? ChatGPT? GPT stands for Generative Pre-trained Transformer, a family of artificial intelligence language models, which was introduced in 2018 by the American artificial intelligence organization OpenAI. It is a type of deep learning model used to generate human-like text. Will it take over your life, and replace every mortgage banking job including writing a daily commentary?

The Knowledge Coop’s Ken Perry & Andrew Lunceford sit down to cover “The Ethics of AI.” What is ChatGPT and what are its implications? “We’ve blown through all the guard rails… will The Terminator become a true story?”

An AI pioneer says its threat to world may be “more urgent” than climate change.

With artificial intelligence in the headlines and fears about what it can do to society, the White House convened a meeting last week that sought to explore the dangers to public safety. Vice President Kamala Harris and senior staff met with the CEOs of leading AI companies like Google, Microsoft, OpenAI, and Anthropic. "It was a frank conversation, which included discussion on three main things," Press Secretary Karine Jean-Pierre said at a press briefing, explaining the requirements needed to ensure AI systems are secure from malicious actors and attacks. The Biden administration previously put out a formal request for comment on potential AI regulation.

Also last week, Redfin announced a ChatGPT plugin a day after Zillow announced one of its own. The plugins, available to select ChatGPT Premium users, enable users to describe homes in a conversational way to ChatGPT and have it pull up relevant listings.

Ken Perry did a search using ChatGPT about what jobs it “thought” (scary) were susceptible to automation or augmentation by AI: Data entry clerks, manufacturing and assembly line workers, customer service representatives, retail cashiers, telemarketers and sales representatives (AI algorithms can analyze customer data and generate leads, while AI-powered communication tools can handle routine sales and marketing tasks), bookkeeping and accounting clerks, warehouse workers, loan officers and underwriters (AI-powered systems can analyze financial data, assess credit risk, and make lending decisions, reducing the need for manual underwriting), paralegals and legal assistants, and radiologists & diagnostic medical professionals.

After all that, if you still want to sign up, here you go.

Training and Events

The MBA’s National Secondary promises to be well-attended, MBA sources tell me, but it is not the only game in town. Let’s see who’s doing what.

In May Enact has multiple live courses to help grow your business and positively impact homebuyers. This month's courses will help you navigate the current market with stress management techniques, an appraisal roundtable on current appraisal market concerns, and strategic uses of MI. Also, review of best practices to avoid common underwriting errors, and understanding the basics of Refi Possible and RefiNow. Browse the Enact course catalog of on-demand webinars, just have your company or individual NMLS ID handy when registering.

Educate & Elevate with National MI University's May Webinars. Available topics include Removing Sales Objections with Ease, with Nancy Bleeke - May 16 at 10am PT

Charting the Course with Andrew Oxley - May 23 at 11am PT. Visit National MI’s MIU page for all the training sessions offered in May.

The private mortgage insurance companies certainly offer a fine set of classes: National MI University, the Enact’s course catalog of on-demand webinars, MGIC, Essent, Radian, and ARCH MI.

PRMG University May TPO Training Calendar is posted, view all trainings offered this month.

Effective September 30, 2023, Ginnie Mae SF Issuers will see a drastic shift in the minimum Net Worth requirement. In a tough market where profitability is hard to obtain, lenders are faced with increased capital requirements among other market challenges. MBA’s AVP of Secondary and Capital Markets, Sasha Hewlett, discusses the requirements and what lenders need to do to prepare at the OMBA Annual Convention May 8-10. Also on tap is a session on construction and renovation lending at the OMBA's Renovation and Construction Lending Summit on May 10th from 9:00am to 12:00 at the Renaissance Westerville Columbus-Polaris.

The Utah Mortgage Show returns on May 10, in Salt Lake City with a free NMLS renewal class, happening Thursday, May 11, when you attend the expo. This event can all be completely free to you, thanks to our sponsors. Just use our code OCNFREE to save $125 off your registration and the registration of up to 9 of your colleagues.

In Massachusetts? Headlines about discrimination by appraisers have been splashed across the country as Fair Housing and discrimination complaints and legal actions have been filed against appraisers, lenders, and appraisal management companies. If you review appraisals, are in quality control, mortgage operations and compliance, join MMBA’s virtual, live-streaming program on May 10th 9-12 ET. Take a look behind the headlines and get answers to the who, what, when, where, and why of the story.

In Colorado, CoAMP is proud to present a panel packed with lending experts to discuss how to make home ownership more affordable. Panelists include Veronica Ware, Colorado Housing Assistance Corporation, Debra Irving, Radian MI, and Dawn McDonald, Towne Mortgage Company at 7979 E Tufts Ave, Denver. Thursday, May 11, 2:00 - 4:00 p.m. The cost is $25 for event Members & Member’s Guests and $75 Future Members.

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

Capital Markets

Friday was the jobs numbers. This week, the April consumer price inflation report will be in the headlines with headline inflation forecast to increase 0.4 percent month-over-month and be up 5.6 percent from a year ago. Last April’s year-over-year number will drop off.

With all the stuff going on, mortgage rates haven’t moved much. The Federal Open Market Committee raised the federal funds target by a widely expected 25 basis points last week and signaled that further policy changes would be data dependent. This marked a change in wording that previously explicitly called for further tightening and has been interpreted as the Fed signaling it may be ready to end the current cycle. We’ll need to see inflation continue to fall and a less robust job market. Those participants who may be hoping for a full reversal were disappointed when Fed Chair Powell responded in the post-decision press conference that, “It wouldn’t be appropriate,” when asked if the committee foresees a rate-cut this year.

Despite a still hawkish policy statement and hawkish comments during the press conference, the markets are still pricing in a small chance of a rate cut in July. Should inflation and jobs continue to trend higher than the Fed’s desired level this may continue this year’s pattern of the markets getting ahead of the Fed in anticipation of lower rates only to re-adjust expectations.

Friday’s employment report easily beat market expectations when it showed 253k jobs added in April. While the headline gain was impressive, significant downward revisions to February and March’s numbers showed overall job growth to be about 149k less over those months than previously reported. Average monthly job growth for 2023 has averaged 284k, down from 399k in 2022 and 605k in 2021. The unemployment rate for April fell to 3.39 percent which is a 53-year low. Overall, this report shows that the Fed's tightening policy has yet to slow down the labor market much.

There are signs that the economy is beginning to cool, such as lower job openings, however everything is coming off historical highs and there is still much further to go before the data reaches pre-pandemic norms. The process is likely to be more gradual than many would prefer. Service sector prices have remained elevated due to resilient demand and the ISM services index for April showed continued expansion in that part of the economy. Additionally, input prices paid by services moved higher in April suggesting the return to 2 percent inflation will be a long process.

This week’s calendar contains some market moving data, including CPI and PPI on Wednesday and Thursday with import prices and Michigan sentiment on Friday, as well as the $96 billion Quarterly Refunding over Tuesday to Thursday. Fedspeak is on the lighter side. Today’s calendar gets underway with a couple non-market moving numbers: wholesale inventories and sales and the Employment Trend Index for April. We begin the week with Agency MBS prices worse about .125 from Friday’s close, the 10-year yielding 3.49 after closing last week at 3.45 percent, and the 2-year at 3.98 percent.