Broker and LO Scorecards, Escrow Mgt., Homebuyer Products; How Many Borrowers are at Less Than 4 Percent?

“The world is going to come to an end tonight at midnight. Tune in tomorrow to see if it did!” Sensationalist headlines or bad predictions are tiresome at best, misinformation at worst. There is actual news, however. For example, thank you to the Knowledge Coop’s Ken Perry who sent along the latest in the Matter of ICE and Black Knight. LOs and underwriters know that the Supreme Court overturned the Biden administration’s student-debt forgiveness plan which would have wiped off $430B in loans from the government's books, and people who worked hard to pay off their debt cheered. Although there are already some alternatives that are in the making, this carries huge implications for inflation, consumer discretionary spending, and the distribution of wealth in the U.S. In other news, the latest update on inflation in the U.S. is this week with June’s Consumer Price Index report. Economists forecast headline inflation to fall to 3.0 percent from 4.0 percent in May and core inflation to be reported at 5.0 percent from 5.3 percent in May. A CPI surprise could reset expectations on the direction of the Federal Reserve. The market is pricing in a 90 percent probability that the Federal Reserve will raise rates by 25 basis points at the July 25-26 meeting. (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. Hear an interview with Stavvy’s Kosta Ligris on the benefits of Remote Online Authorization (RON) and advances from Ginnie Mae's recently published All Participants Memorandum.)

Lender and Broker Software, Services, and Products

On Nov. 15, millions of fans endured what felt like “several bear attacks to purchase Taylor Swift Eras Tour tickets on Ticketmaster’s flailing website. Don’t let your customers suffer the same fate as Swifties as they try to purchase their ticket to homeownership. SimpleNexus, an nCino company, enables you to extend a modern mortgage experience with the convenience of a single-sign-on portal where homebuyers can manage their search listings, complete their mortgage application, and sign closing documents from anywhere. See how SimpleNexus can give your business a leg up with modern mortgage technology that elevates the borrower experience and enhances efficiency by scheduling a demo.

“At NexBank, we are committed to our clients’ success by offering highly competitive products and services in Wholesale and Correspondent Lending, Warehouse Lending, and Treasury Management including Escrow Deposit Management. NexBank’s business is focused on residential housing and driving growth through our TPO channels. Our teams have been built to serve the TPO market. We do not compete with our clients for retail originations or refinancing business and are dedicated to their growth and invested in their success. NexBank offers unique products and competitive rates, and exceptional client service is our mission. To ensure our clients’ experience is simple, fast, and efficient, we are excited to announce that we have hired two new account executives to our strong and experienced sales team: welcome Adelfo Emanuele and Wendy Papaj! To learn more, visit us at the NAMB National Annual Conference this September or contact us today. Member FDIC, Equal Housing Lender, NMLS 672886.”

Mortgage professionals in the market for new technology know that buying new solutions is only the start; it’s getting them implemented without missing a beat that’s critical. That’s why Black Knight held discovery sessions with dozens of lenders to see how they implement new solutions while keeping business disruptions to a minimum. Read Black Knight’s new blog ‘You’ve Selected the Tech – Here’s How You Avoid a Failure to Launch’ to see how 32 decision-makers at lending organizations of all sizes handle their deployments. You’ll learn the ways you can build your own strong rollout plan before implementation starts, and how your own employees can actually make deployment go smoother. Read the blog today, then talk to Black Knight when you’re ready for proven mortgage solutions with white-glove implementation.

Grow that Pipeline with LoanStream’s Summer Specials on Non-QM and Government. Includes Price Improvements on FHA, VA, Select Government loans. Plus, Specials for Non-QM includes Full Doc, Alt Doc and DSCR. Here for a limited time so don’t wait, contact your Account Executive for full details as restrictions apply, or visit here. Plus, MaxONE DPA programs are now available in Massachusetts! Finance up to 100 percent CLTV with 600 Min FICO. Contact your AE to learn more.

Roller coasters are usually a thrill, but the people stuck upside down for nearly 3 hours last week on a Wisconsin ride might disagree. Similarly, mortgage production volumes have had lenders on a roller coaster lately and it’s one we never wanted to be on in the first place. As production levels out, do you know how your recent performance compares to that of your peers? Find out right now with MMI’s monthly Mortgage Industry Benchmarks newsletter, which lets lenders and LOs compare their recent performance to their peers via production-based tiers. Are you on the same track as your competition or are you on a completely different ride? Sign up for MMI’s monthly newsletter to find out!

Is your focus to do more with less? A business intelligence 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, including real-time peer benchmarking data, 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.

Learn the process that enables lenders to more than double their average AE monthly loan volume. Wholesale lenders need efficient broker account policies to ensure the success of their Account Executives. Managing a sales force responsible for engaging with tens of thousands of mortgage brokers while competing with larger and more technologically advanced competitors requires a sound and scalable process. OptifiNow’s Mortgage Broker Scorecard shows wholesale lenders how to build a highly efficient sales process that guides the right AE to call the right broker at the right time. Download the Mortgage Broker Scorecard for free today!

Current Temperature of Housing Prices and Residential Lending

Black Knight’s monthly Mortgage Monitor is out this morning. “The housing market showed clear signs of reheating in May, with the seasonally adjusted Black Knight Home Price Index hitting an all-time high. The fifth consecutive month of growth, May’s 0.7 percent M/M gain is equivalent to an annualized rate of 8.9 percent, despite the backward-looking year-over-year growth rate currently hovering at 0.1 percent. If the rate of growth we’ve seen over the past few months continues, annual growth would remain at or near 0 percent for just a short time before inflecting and trending sharply higher. Home price gains over the past five months have now completely reversed the declines the market experienced last fall. In fact, 27 of the 50 largest markets and the US have returned to their prior home price peaks or set new highs this spring. It all comes down to inventory, and for-sale listings have deteriorated in 95 percent of major U.S. markets this year, leading to some dramatic swings in home price trends.

“Meanwhile, more than 60 percent of existing mortgage holders (thus potential sellers) are sitting on first lien rates below 4 percent, with significant disincentive to list in this high priced, low inventory, high-rate environment. High rates and their impact on affordability are simultaneously doing a number on demand: the monthly P&I payment on the average home purchase hit an all-time high in May. And just this week, rising rates made this the least affordable housing market in 37 years. Here is the full report.”

Capital Markets

Friday, we digested the latest nonfarm payrolls report following hotter than expected private hiring data the previous day. The U.S. government report showed the economy created 209,000 jobs in June, well below expectations and the smallest increase since the end of 2020. The data was taken by some as a sign that the Federal Reserve's interest rate hikes were finally starting to cool the labor market, but other details of the report such as stronger than forecast wage gains suggested the Fed may have reason to resume raising rates later this month.

Yes, the main headline to close last week was that U.S. job growth (+209k for June) was solid but came up short of expectations and well short of the estimate of 500k of new payrolls seen in Thursday's ADP Employment Change report. While the pace of hiring has slowed, 2023’s average monthly job gains are currently at 287,167, which still outpaces all pre-pandemic years going back to 1997. The June employment report was the first employment report to come in below forecast over the last 15 months but stronger-than-expected wage growth for June is likely to keep the Fed on track to raise interest rates July 26.

Wage inflation is the Fed's biggest concern, staying at a plateau for the past several months after declining in the second half of 2022, meaning there’s still some ways to go to get back to a level the Fed is comfortable with. June average hourly earnings were up 0.4 percent, meaning that over the last 12 months, average hourly earnings have risen 4.4 percent, versus 4.4 percent for the 12 months ending in May. Jobs growth may have slowed but remains too strong and wage pressures are still too strong to justify an extended Fed pause. Pre-pandemic, average hourly earnings were increasing at around 3.5 percent.

This week’s calendar contains plenty of market moving potential including the $90 billion mini-Refunding over Tuesday to Thursday, with updates on consumer prices for June (expected to rise 3.1 percent year over year), producer prices, and many Fed speakers scattered throughout the week. In addition, earnings get under way with JP Morgan, Citigroup, Wells Fargo, and State Street reporting on Friday.

Today’s calendar gets under way mid-day today with the non-market moving May Employment Trends Index and wholesale inventories and sales for May. The afternoon brings May consumer credit and remarks from San Francisco Fed President Daly, Cleveland Fed President Mester, and Atlanta Fed President Bostic. We begin the week with Agency MBS prices roughly unchanged from Friday night, the 10-year yielding 4.07 after closing last week at 4.05 percent, and the 2-year at 4.91.

Employment

“Equity Resources is an independent/ privately-owned mortgage banker that is proudly celebrating our 30th anniversary! Our longevity and continued success are quite simple; we listen to, invest in, and develop our team members! In a slower market, we cross-train our team, we do not lay them off. “Improving the lives of families” is our core purpose and this begins with all our team. While uncertainty and concern are running rampant in the mortgage markets, we are creating opportunities for our award-winning loan officer team! Equity Resources is actively seeking focused loan officers throughout our 19 footprint states. In addition, we are also seeking an account executive for our B2B division with a history of working with credit unions and community banks. If you are frustrated with the direction of your mortgage career and would like to have a conversation about “Why Equity”, please contact Tom Piecenski, EVP of Sales and Development, at 614.327.5353.”

“Calling all LOs looking to dominate in their local market? Look no further than PrimeLending! We believe that you, as a loan originator, know exactly what it takes to succeed in your community. That's why we empower you to build your business your way. With over 400 loan programs, including 23 renovation loan products, we offer all the flexibility you need to impress your clients and business partners. And when it comes to our production leaders, they believe in giving you the space you need to excel. In fact, in our latest Great Place to Work employee survey, 97 percent of our team said that management trusts them to do an amazing job without looking over their shoulders. So, if you're ready to take the reins and steer your own professional journey, get in touch with Nic Hartke to talk about joining the PrimeLending family. Get ready to soar towards a bright future!”