Third-Party, Down Payment, Outsourcing Products, Freddie and Fannie Updates for Appraisals

It isn’t as if building or lending products, or ways of doing business, were handed down by Trappist monks. Change is always afoot, for better or worse. What is old is new again. Teachers are moving to oral exams to counteract AI and ChatGPT, similar to ancient Greek and Roman times. In the West and Southwest, adequate water rights and supplies have always been contentious but have resurfaced (get it?) with news that may impact other cities and towns: Arizona began limiting approvals for new developments within the Phoenix area. It’s hard to build large affordable housing developments or swaths of housing in general if there is no water. Or road or sewage capacity. For fans of tiny homes, what is old is new again, and the Sears catalog kit houses (sold between 1908 and 1942) of old are back at Home Depot: Here’s 837 square feet for $43,000, 540 square feet for $44,000, and 444 square feet for $32k. (Today’s podcast can be found here and this week’s is sponsored by Built Technologies. Join Built Technologies on June 20th at 12 PM CST for an exclusive webinar that will dive into proactive portfolio monitoring as Built’s experts share best practices for achieving greater visibility into your construction portfolio. Today’s includes an interview with American Land Title Association’s Elizabeth Blosser on non-title recorded agreements for personal service, NTRAPS.)

Lender and Broker Products, Software, and Services

Many historic events have happened on June 20, and counting. In 1837, Victoria was crowned Queen of England at the age of 18. In 1975, Steven Spielberg’s Jaws was released in theaters. And in 2023, three renowned thought leaders from Optimal Blue, a division of Black Knight, will share their knowledge at MBA Florida’s Eastern Secondary Conference. Don’t miss the opportunity to hear Mark Teteris, CMB, lead a panel discussion about a day in the life of a secondary manager. Then, Mike Vough will share his expertise during a session focused on hedge advisory firms and mortgage servicing rights. Finally, Steve Baselice will participate in a timely panel focused on hedging your pipeline in turbulent market conditions. Don’t miss these informative sessions while you’re in Orlando. It could be your chance to be part of history in the making!

Click links, ask questions later. The most common attack vector for a cyberattack is the human element. It’s what phishing emails, phone calls and text messages all have in common. Yet while it's the weakest link, the human element could be your organization’s greatest prevention layer if trained correctly. In an industry that incentivizes people based on sales goals, every mortgage lead has bottom line potential. And in the current market, it’s only human to go after leads without stopping to consider their legitimacy. But recent data shows just how risky clicking without thinking can be. According to ISACA, in 2022 social engineering (tricking humans) was the #1 attack vector, and even the best teams are vulnerable. Learn how to do a better job at testing and training your team to identify legitimate leads. Talk to Richey May’s cybersecurity experts for help assessing and defining your cybersecurity training needs.

“We won’t waste your time discussing the challenges we all are facing. In this market, it is a numbers game, and the sales math says that the more people you talk to, the more opportunities you will have. Your database has never been more critical, and with referrals drying up, you have to have more conversations, period. So at rebel iQ we built a solution that would not only give our clients more at-bats with consumers but also to be able to deliver these opportunities consistently. Two weeks ago, we launched rebel IGNTIE, which provides exclusive lead opportunities to our clients every month, guaranteed. On June 21st, we invite you to join our webinar with our CEO Andrew Pawlak, EVP of Growth Jason Frazier, and Mortgage Marketing Expert Scott Schang, where they will show you the strategy that will put you in the best position for success in 2023.”

Halcyon, an innovative fintech firm, has partnered with Freddie Mac and ICE Mortgage Technology to revolutionize income verification and simplify the loan application process, making homeownership more accessible. Through direct IRS integration, Halcyon's data solution allows Freddie Mac's Loan Product Advisor® (LPA) to access income information faster and at a lower cost, with consumer permission. Integration with ICE Mortgage Technology's Encompass Partner Connect™ API platform provides seamless access to Halcyon's IRS VOI, offering real-time income and tax data. This partnership signifies a significant step towards digital transformation in lending, optimizing operational efficiency and ensuring a fairer, faster loan approval process for borrowers. Halcyon's CEO, Kirk Donaldson, expresses excitement about these partnerships and their potential to bring groundbreaking income verification solutions to the mortgage market, streamlining the process. Contact us for more info!

Why outsource your processing, underwriting, and closing to Computershare Loan Services (CLS)? Here are 6 great reasons! 1) Immediately turn your fixed expenses into variable costs. 2) CLS implements and maintains a POS and LOS, so you’re always on top of tech innovations. 3) CLS will hire and train the staff to support your business. 4) You can lean on CLS’ airtight risk and compliance teams. 5) Pick a model that works for your budget: onshore, offshore, or a hybrid. 6) You can focus on lead generation and leave the rest to CLS. Contact CLS today to learn more about outsourced fulfillment!

Anthony Balsamo, from mortgage website provider Vonk Digital, engages in a conversation with Nicole Rueth, a top originator from The Rueth Team and SVP of Movement Mortgage. This conversation is highly recommended for company owners, brokers, branch managers, and loan officers. They cover important topics such as the benefits of having a niche, creating social content, the value of having a coach, hosting events, and more. If you are reassessing your strategy or seeking inspiration from a successful market leader who is actively preparing for the future, you don't want to miss this insightful conversation with Nicole. Click here to watch the video directly.

Do you find the customer service with your point-of-sale provider lacking? Maxwell understands that today’s lenders need fast, reliable service. When you partner with Maxwell Point of Sale you’ll have a dedicated support manager. Maxwell’s support team averages a 43-minute response time, faster than its competitors and a 91 percent satisfaction score, and is always on standby to help you make the most of your investment and ensure a seamless experience for you and your borrowers. With an average implementation time of less than 2.5 weeks, Maxwell Point of Sale can start working for your team quickly. Schedule a call to learn more.

Click n’ Close (CnC) has provided more than $1 Billion of Down Payment Assistance (DPA) related financing to borrowers since the program's inception in 2020. CnC celebrates this key milestone with its SmartBuy Down Payment Assistance Program. More than 4,000 borrowers have benefited, with average assistance of nearly $10,000. This national program was initially launched as a pilot in retail as a complement to the 2500+ housing programs across the country. Ultimately, CnC found a single program much easier to manage for borrowers and origination partners. CnC has expanded SmartBuy DPA to all channels, including wholesale and correspondent lending. The program has also added several innovative features, including a repayable option with amortization to 30 years and a 2-1 buydown option. Contact Adam Rieke or Kerry Webb (wholesale) or Julas Hollie (correspondent) to get started today.

TPO Product News

“Great news! New heavy hitting Correspondent Regional Sales Executives have arrived at LoanStream, even more reason to contact us for your Correspondent Lending needs. LoanStream welcomes Ron Broccardo, covering the Heartland and Overland territory with over 20 years of experience at Wells Fargo and 25 years of industry experience. Eddie Fernandez, covering the Southwest and West coast with over 25 years of experience at Wells Fargo and 35 years of industry experience. Karen Mesi, covering the Midwest and Great Lakes with over 23 years of experience at PenFed Credit Union via TIAA/Everbank and most recently, ONE American Bank. Eddie Bean covering the Southeast, with over 25 years of experience at Wells Fargo and 31 years of industry experience. Our Correspondent division offers best in class product offerings including, Delegated, Non-Delegated and Emerging Banker, Plus Conforming, Government, Jumbo AUS, and Non-QM strong pricing on all programs. Learn more: Home - LoanStream Mortgage Correspondent (lscorrespondent.com).”

“The LendingOne TPO team has increased its leverage! We are committed to providing mortgage brokers with the most competitive rates and terms in the industry. Receive up to 80 percent LTV on purchases and up to 75 percent LTV rate/term & cash-outs on our DSCR Rental Loans. The LendingOne TPO team is also heading to Las Vegas for the Mastermind Summit on June 7th-9th. If you are attending, let’s schedule a time to meet onsite and discuss these new leverage options along with the rest of our suite of loan products designed to support our mortgage brokers. Call us today to learn more: 866-794-0937 or visit our website.”

Freddie and Fannie Program Updates

When looking at what we’re producing, non-Agency volume (think non-QM, jumbo, or portfolio) runs about 5-10 percent, FHA & VA & USDA about 25 percent, and the rest, consistently, is conventional conforming. So, it behooves the industry to watch Freddie Mac and Fannie Mae to see what they’re up to.

Fannie Mae issued a new Selling Notice on May 24, 2023, regarding effective date for Main Living Area Photographs in Appraisals.

Fannie Mae has enhanced Condo Project Manager™ (CPM™) in preparation for its required use for Full Review loan applications dated on and after July 1. The enhancements included updating CPM IDs to be consistent in length, allowing correspondent lenders to request access, and switching Loan Delivery edits to a “warning” status.

Fannie Mae issued a reminder for homeowners and renters impacted by natural disasters, including those affected by Typhoon Mawar in Guam, of available mortgage assistance and disaster relief options. Mortgage servicers are also reminded of these options to assist people, especially as storm season begins nationwide. Homeowners and renters looking for disaster recovery resources may visit FannieMae.com to learn more about addressing immediate needs.

Freddie Mac published an Industry Letter in response to recent inquiries related to the reduced availability of condominium project insurance. It also serves as a reminder about Single-Family Seller/Servicer Guide (Guide) requirements concerning property insurance and coverage amounts for condo projects.

June is National Homeownership Month – stay updated with the latest Loan Product Advisor® (LPASM) enhancements you need to create more opportunities for qualified borrowers dreaming of homeownership. Freddie Mac announced enhancements to its automated income assessment tool that allows lenders to assess a homebuyer’s income paid through direct deposit to also include the borrower’s digital paystub data. This detailed information can help lenders calculate income faster and more precisely to improve loan quality, simplify the mortgage process and, most importantly, expand access to credit. The new ability to include paystub data in addition to direct deposit data in the income assessment is available to mortgage lenders nationwide through Freddie Mac’s Loan Product Advisor® (LPASM) asset and income modeler (AIM).

FHFA Announced its membership in the Mitigation Framework Leadership Group (MitFLG).

Fannie Mae and Freddie Mac updated the Partner Playbook for the Enterprise Credit Score and Credit Reports Initiative: expanded FAQs, new details on the hypothetical revised score calculation, and access to a recording of the recent industry forum. There’s still time to give feedback on the proposed timeline and other implementation considerations. Visit the webpage to view the updated playbook and access the industry survey.

Area median incomes (AMIs) for 2023 will be implemented in Desktop Underwriter® (DU®) and HomeReady® application programming interfaces (APIs), Loan Delivery, and the Area Median Income Lookup Tool effective June 12th. The AMIs will continue to be applied in DU based on the casefile create date while the Application Received Date provided in Loan Delivery will be used to determine which AMI limit to use when evaluating eligibility for the loan-level price adjustment (LLPA) waiver.

On June 8th, Freddie Mac will be updating Loan Product Advisor® (LPASM), the Home Possible ® Income and Property Eligibility Tool, the Refi Possible® Income and Property Eligibility Tool and the Area Median Income and Property Eligibility Tool with new area median income (AMI) limits issued by the Federal Housing Finance Agency (FHFA).

Freddie Mac publishes a monthly Appraiser Capacity Report showing the number of appraisals submitted to the Uniform Collateral Data Portal® in comparison to the number of active appraisers. Subscribe for Appraisal and Collateral Valuation news.

Capital Markets

For some good news, Eurozone inflation declined to a 15-month low of 6.1 percent in May, which could give the European Central Bank justification to pause its rate-hike cycle. The ECB is still expected to raise rates another 25 basis points this month, but recent inflation data could open the door to pause later this summer. Like us. The stock market certainly closed out the holiday-shortened week on a strong note, with the Dow Jones average soaring 700 points for its biggest point gain of the year. Investors cheered the passage of a debt ceiling bill that averts a U.S. default, but the biggest driving factor was May's jobs report, which showed U.S. employers added a seasonally adjusted 339,000 jobs, far more than expected. The data also showed a moderation in year-over-year average hourly earnings growth and a bump up in the unemployment rate to 3.7 percent from 3.4 percent, which helped push recession and rate hike fears to the backburner, at least for now. U.S. Treasury yields rose, with the two-year note surging 18 basis points to 4.51 percent and the benchmark 10-year yield adding 8 basis points to 3.69 percent.

Friday, we learned that the labor force participation remained at 62.6 percent and the unemployment rate ticked up to 3.65 percent. One of the factors influencing the participation rate has been a declining number of workers in the 55 years and older category since the pandemic. Average hourly earnings rose 4.3 percent from one year prior. During April, job openings increased by 358k and there were roughly 1.8 jobs available per unemployed person. The “quits-rate” was 2.4 percent, near the pre-pandemic average of 2.3 percent, and layoffs and discharges fell to 1 percent, below the 2018-2019 average of 1.2 percent. The service sector continues to create jobs and the number of vacancies suggests that wages may continue to rise due to the number of openings needing to be filled. Upside surprises to service sector wages could prompt Fed officials to move interest rates higher.

The payrolls report renewed hope that a soft landing is possible while the slowdown in earnings growth and the uptick in the unemployment rate were seen as clues that the Fed might be more inclined to pause or “skip” its rate hike campaign at the next Federal Open Market Committee meeting. Keep in mind that the Fed admittedly remains data dependent, and May CPI (scheduled for release on 6/13) a couple days ahead of the FOMC rate decision has the potential to impact FOMC policy decisions.

This week’s calendar is light ahead of next week’s FOMC events. Today’s calendar gets under way later this morning with S&P Global services PMI, followed by ISM non-manufacturing PMI, April factory orders, the May Employment Trends Index, and the last scheduled Fed speaker ahead of the June 13/14 FOMC meeting when Cleveland President Mester delivers remarks. We begin the 5-day workweek with Agency MBS prices worse .125-.250 from Friday and the 10-year yielding 3.75 after closing last week at 3.69 percent. The 2-year is up to 4.56.