POS, Dashboard, Credit Verification Products; Freddie and Fannie Changes; Today's CPI Suggests Fed Holds Steady Tomorrow?

Sad?: “Invitations to the Unabomber's funeral were mailed out, but no one wants to open them.” Hopefully not sad: for anyone wanting to know about comp for processors, underwriters, or LOs, STRATMOR’s current blog is, “Compensation: Ever Changing.” Sad for real: Comerica (CMA) announced that it is “organically” exiting mortgage banker finance, aka, warehouse lending. (Talk to your rep for details.) Sadder: this story about what to do when the U.S. becomes uninsurable. “Climate change means actuaries are making a radical new calculation about the price of risk.” Some would say sad, but with a hint of optimism: volume in residential lending, although it did pick up last month! According to Curinos, May 2023 funded mortgage volume decreased 37 percent YoY and increased 23 percent MoM. In the Retail channel, funded volume was down 44 percent YoY and up 23 percent MoM. The average 30-year conforming retail funded rate in May was 6.36 percent, -1bps lower than April and 136bps higher than the same month last year. Curinos sources a statistically significant data set directly from lenders to produce these benchmark figures. (Today’s podcast can be found here and this week’s is sponsored by SimpleNexus, the homeownership platform that unites the people, systems, and stages of the mortgage process into one seamless, end-to-end solution that spans engagement, origination, closing, incentive compensation, and business intelligence. Today’s has an interview with Black Knight’s Frank Poiesz on what lenders need to do to be ready to adopt AI solutions safely.)

Broker and Lender Products, Services, and Software

Most fans enjoy the “free baseball” that comes with extra innings. However, fans at the longest game in professional baseball history might beg to differ after the 33 (mostly scoreless) innings they took in. But did you know that Down Payment Resource can help you score more volume by recovering some of the 33 percent of declined loan applications that could have been saved with homebuyer assistance? In a market where lenders need to hang on to every fundable loan, Down Payment Resource’s DPA directory of over 2,000 homebuyer assistance programs is an essential tool to help qualified borrowers build wealth through homeownership. Request a personalized Declined Loan Analysis to learn how many more borrowers you can send home.

AFR Wholesale® is incredibly honored to be recognized as the “Champion for Wholesale Manufactured Home Lending” by the USDA. As we continue to celebrate National Homeownership Month, what more of a heartfelt appreciation we have for being selected and highlighted at the USDA SFH Guaranteed Lender Awards in Washington, DC. Chris Guerin, AFR’s EVP of Origination and Business Development said it best when accepting this award, “At AFR, we firmly believe that local third-party originators play a pivotal role in the real estate market…It is through their expertise and tireless efforts that we can provide the vital financial support necessary for aspiring homeowners.” So, with a profound sense of gratitude and pride we would like to send a heartfelt thank you to our AFR partners. Here’s to a future where affordable housing becomes a reality for all. Have a USDA transaction? Contact us today! www.afrwholesale.com , sales@afrwholesale.com or call 1-800-375-6071.

“Your borrowers can eSign their SSA-89 with Service 1st! Eliminate wet signatures in your disclosure packages. Pioneers in the industry for 4506-C/TRV Services® accessible through most LOS platforms, supporting eSign and Day 1 Certainty. There is pain in the market with unpredictable service and rising costs for VOE cascades/waterfalls. We know how important borrower experience is for you. We are 100 percent onshore support and order fulfillment. S1 is the mortgage industry’s performance leader in credit and loan verifications with over 80 percent same-day supplements. Nearly half of all manual VOE/I are completed in under 12 business hours. Learn why we're Service 1st! Contact us today.”

In a turbulent mortgage market, it’s all hands-on deck. Brokers, credit unions and banks are challenged to do more with less and running a tight and profitable ship means being as efficient as possible. That’s why lenders are turning to Black Knight’s mortgage automation technology to help find new cost savings, decrease turn times and increase the effectiveness of mortgage employees. Powered by a competitive, automation-focused loan origination system, Black Knight’s solutions operate in the cloud and feature time-saving tools like an online point of sale, AI document classification and indexing, a pricing engine, fee service and more. In a market where every second counts, there’s no time to waste. Read more here about how automation is helping lenders navigate choppy seas. Then schedule a demo with Black Knight to see what their automated solutions can do for you.

Is your focus to do more with less? A BI solution should highlight where there are opportunities to incorporate efficiencies and reduce costs. The most forward-thinking industry leaders are turning to Richey May’s RM Analyze to learn what they need to know now more than ever: how to operate even leaner. It’s half the cost of a full-time employee, and you gain access to a strong bench of talent with a rich background in the mortgage industry and access to hundreds of reports in no time. With these insights you can make meaningful decisions for your business and do more than just survive. Learn how to operate leaner.

Does it feel like your current point-of-sale vendor has lost focus on mortgage? As a mortgage-specialized partner, Maxwell is committed to giving lenders a competitive advantage in a tough mortgage market. Compared to a top competitor, Maxwell Point of Sale averages a 5.9 percent higher pull-through rate from rate-lock to close. For the average lender using Maxwell POS, this equates to $42MM in additional loan volume. Maxwell also focuses on providing an excellent borrower experience, with a 17 percent faster turn-time from application submission to conditional approval. Schedule a call with the team to learn how Maxwell Point of Sale can start working for you and your borrowers quickly.

Fannie and Freddie News

Do you know what a Gold Book is? When looking at what we’re producing, non-Agency volume (think non-QM, jumbo, or portfolio product) runs about 5-10 percent, FHA & VA & USDA about 25 percent, and the rest, consistently, is conventional conforming. So, Freddie Mac’s and Fannie Mae’s moves are closely watched.

Freddie Mac launched a new mortgage product to support members of Native American communities. HeritageOne℠ will provide affordable financing options for single-family properties on tribal lands in rural areas, creating greater access to homeownership. It will also provide financial counseling and other resources to members of Native American tribes, especially first-time homebuyers. The intent behind HeritageOne is outlined in Freddie Mac’s 2022-2024 Duty to Serve Plan, which specifically details the company’s commitment to provide housing support for tribal members in rural tracts within Indian Country.

Freddie Mac Seller/Servicer Guide Bulletin 2023-13 provides updates addressing:

HeritageOne℠ mortgages, a new conventional loan offering for borrowers who are members of federally recognized Native American tribes purchasing property located in Native American tribal land. The addition of borrower paystubs to be included in the assessment in Loan Product Advisor® asset and income modeler (AIM) for income using direct deposits. Expanded single-wide manufactured home eligibility and revised manufactured home appraisal requirements.

Updates to Guide Form 400, Warranty of Completion of Construction. New cash-specified payup types for 10-,15-, 20- or 30-year fixed-rate mortgages, when you sell for Cash using the Best-Efforts execution option. 2023 Area Median Income Limits and how Area Median Income is used for Credit Fee Caps.

Get an early assessment of Freddie Mac affordable product eligibility to maximize benefits for your borrower. Affordable Check lets you quickly and easily identify candidates for competitive conventional loan programs. Watch this Affordable Check API video to learn more.

Fannie Mae SEL-2023-25, June Selling Guide update includes information regarding allows temporary interest rate buydowns for mortgages secured by manufactured homes; allows 7- and 10-year adjustable-rate mortgage (ARM) borrowers to be qualified using only the note rate;

adds clarifying details for amounts that may be included with the payoff of existing loans in limited cash-out refinance transactions; and makes miscellaneous updates.

Freddie Mac will be hosting the 5th annual Rural Research Symposium on November 2nd at the Hilton at the Mall in Washington D.C. This year, the symposium will be in-person and offers a platform for academia, nonprofits, government, and industry to gather, present research and discuss the state of housing in rural markets.

Capital Markets

How has your experience been transitioning to updated agency AMI values? Are you looking to obtain loan-level pricing, improve efficiency, and ensure data accuracy when committing your loans to Freddie Mac? MCT’s Rapid Commit features intelligent best execution capabilities and is the first secondary marketing software firm to integrate with Freddie Mac’s Income Limits API created for first-time home buyer AMI limits. "MCT’s Income Limits API with Freddie Mac has ensured we are pricing out loans with accurate LLPA values when we have loan sales. Given the complexities of the new income and region related LLPAs, this integration has allowed us to not skip a beat,” said Arie Pisarevsky, Capital Markets – Hedge Manager at Bay Equity Home Loans. “We appreciate how MCT and Freddie Mac work together to continue adding value for us with these API integrations." Learn more about MCT’s integrations with Freddie Mac or schedule a call today.

It’s crunch time. Consumer prices today, followed by the latest Fed decision and Chair Powell’s press conference tomorrow. Following ten consecutive rate hikes, there’s cautious optimism that the fed funds rate may be approaching the peak of this tightening cycle. However, the Fed decision and hawkish/dovish tilt of the Summary of Economic Projections will impact rates for the foreseeable future. Even if the Fed opts for a pause in its interest rate hikes, a more prolonged break from the Fed's aggressive tightening stance is unlikely and expectations for another 25 basis points increase in July remain in place. After tomorrow’s Fed decision, the central banks of Europe and Japan hold monetary policy meetings later this week.

Getting a little ahead of myself here, when is any homeowner with a 3 percent mortgage going to see the opportunity to refinance into a lower rate? How about those with a 4 percent rate? Before the Fed decision, the U.S. Treasury will finish selling $296 billion worth of debt. That started with $123 billion worth of bills and $72 billion worth of notes yesterday with the remainder set for auction today. The market did a good job absorbing nearly $200 billion worth of bills and notes to open the week, good news as prices of Treasuries declining would likely ultimately increase mortgage rates. The current average mortgage rate is just under 6.5 percent. Despite elevated inflation and interest rates, consumer spending among Americans rose a strong 2.3 percent in April from a year earlier. It’s puzzling that people aren’t cutting back when almost everything is more expensive.

Today brings the aforementioned all-important May CPI report. Headline CPI increased .1 percent, exactly as expected month-over-month and 4.1 percent year-over-year with the core reading rising 0.4 percent month-over-month, as expected and 5.3 percent year-over-year versus 0.4 percent and 5.5 percent previously. Real weekly earnings were -.7 percent when it was seen declining 0.1 percent month-over-month. Prior to CPI, markets received an update on NFIB small business optimism for May, as if anyone cares. Later today brings Redbook same store sales, a Treasury auction of $18 billion reopened 30-year bonds, and the beginning of the Fed’s two-day FOMC meeting. After the inflation data, 30-year Agency MBS prices are better .250-.375 and the 10-year is yielding 3.70 after closing yesterday at 3.77 percent. The 2-year is at 4.53.

Employment and Transitions

At its annual all-employee State of the Union event, Homeowners Financial Group announced the promotion of Nitesh Patel, who was named EVP of Operations. Patel has worked in the mortgage industry for more than 20 years and joined Homeowners as a Closing Manager in 2007, three years after the company’s inception. Instrumental in the nationwide growth of Homeowners, he has played a key role in the company’s ability to weather down markets and emerge on the other side as a stronger lender with increased market share. “It’s been an honor to work with Nitesh for the last 16 years,” said HFG CEO Bill Rogers. “He’s brought so much to this company and I’m looking forward to the next stage of his growth and his contributions to Homeowners.” “My main goal is to make sure that we’re driving home our company’s core values and ensuring our clients’ needs are being met,” Patel said. Homeowners Financial Group continues to add key personnel in selected markets; reach out to David King.

Movement Boost, Movement Mortgage’s new down payment assistance program, aims to eliminate barriers and make the dream of homeownership a reality for homebuyers across the country. The program is available nationwide (excluding New York) to help qualified FHA borrowers cover the required 3.5 percent down payment and even a portion of closing costs. Movement Boost will expand the company’s impact across the country, particularly for first-time homebuyers. The program builds on the momentum started with Movement’s Grab The Key and Comunidad initiatives to help even more diverse and often underserved communities take the first steps toward homeownership. Want to learn more about Movement Boost and Movement’s Impact Lending initiatives? Join a virtual discovery call with members of the company’s leadership team this Thursday, June 15 from 3-4 pm ET. Participation is anonymous!

Draper and Kramer Mortgage Corp. announced that Coleen Bogle has been promoted to Chief Marketing and Growth Officer. Bogle, who has 15 years of mortgage marketing management experience, joined the company in 2015 as Director of Marketing and Communications and will oversee growth and recruiting for the company. Congratulations!