Secondary Marketing, Broker Delivery, Outsourcing Products; Conv. Conforming News; Rates, Inflation, and the Fed

For anyone attending the California MBA’s Western Secondary starting this weekend, here’s a challenge too good for any tennis players to pass up. Augie Del Rio, CEO of Gallus Insights, and I will play doubles against anyone Sunday afternoon from 2-4PM across the street from the Waldorf. The loser of 2 out of 3 sets pays $500, the winner gets to decide the charity. First two to email Augie snags the opportunity. (I don’t know Augie’s skill level, but I am old… it’ll be like shooting fish in a barrel.) Speaking of the Western Secondary Market Conference, the California MBA uses the financial resources derived from this to support advocacy efforts in Sacramento. No “lobby rats!” If you’re going, sign up. Support the organization! (Today’s podcast can be found here and this week’s is sponsored by Richey May, a recognized leader in providing specialized advisory, audit, tax, technology and other services to the mortgage industry for almost four decades. Hear a short chat between Robbie and me on the Western Secondary Conference and its impact over the years on the industry.

Lender and Broker Software, Products, and Services

Even if you haven’t entered the world of online dating, no doubt you’ve heard the phrase “swipe right.” Online dating profiles provide a person’s quick summary and those viewing can swipe right in hopes of a match and the chance to learn more. Similarly, Mobility Market Intelligence (MMI) has released its new LO Quick Profiles tool, providing a summary of an LO’s production and top referral partners, allowing lenders to evaluate LOs based on real-time, accurate transaction history. With the click of a button, you can view production volume metrics including loan production volume, transaction types, loan types, top buy-side & list-side agent partners and top regions based on performance. MMI’s LO Quick Profiles also arm recruiters with the concrete performance data they need to decide whether or not to “swipe right” on potential candidates. Learn more about your potential matches with MMI’s LO Quick Profiles today.

For independent mortgage banks coping with shrinking production volumes and rising costs per loan, outsourcing accounting is an elegant solution to what’s become a very common challenge. Whether you have no accounting expertise in-house or you have a new team with no mortgage experience, you can tap the Richey May Client Accounting and Advisory Services (CAAS) team for the support you need. This team is stacked with mortgage industry experts who can tailor your solution to meet your most pressing needs in a volatile time, with no training needed. Need help transitioning to loan level accounting? Need a fully outsourced function? You got it! Need industry training for your controller? We can do that. In this article, Richey May’s expert Kim Dittmer answers all your most frequently asked questions around outsourced accounting as a mortgage bank.

“Brokers can now shop, lock, and deliver on one platform that seamlessly connects brokers, lenders, and originators. In this market, hustle is everything. You can’t afford to waste a single deal… Or a single minute. That’s why ReadyPrice has launched its innovative new Shop, Lock & Deliver loan exchange platform, designed to help independent mortgage brokers like you save time and money. Now you can shop competitive loan offerings from multiple lenders, get rate lock guarantees in real time, receive underwriting findings, and deliver the borrower’s complete loan file to lenders, and all on a single platform, at no cost to brokers. It’s the industry’s most powerful universal delivery portal, and it’s already helping thousands of brokers around the country thrive and compete in even the toughest market environments. Multiple lenders. One platform. Zero b.s. Come check us out today.”

Capital Markets and Secondary Marketing Products

“The author Charles R. Swindoll wrote: ‘The difference between something good and something great is attention to detail.’ At Optimal Blue, we echo that spirit in our CompassEdge pipeline hedging and loan trading platform, which has the most granular and accurate real-time position and gain/loss reconciliation tools available. At a time when every basis point matters, you can’t afford a black box approach to these critical aspects of monitoring and improving your hedge performance. CompassEdge analytics provide the ability to drill down on the loan and trade level, with interactive tools that are also integrated with real-time pipeline and market data. Other systems just can’t match the analytics performance that is at the core of CompassEdge. You deserve detailed information and insights to improve financial performance. With margins razor thin, why settle for something less than great? Speak with one of our capital markets experts to learn more.”

“After little movement within the Secondary technology space, there have been a lot of new and exciting updates recently. Between new product and pricing engines, new API capabilities, transition to new hedge management firms, the sunset of GinnieNet, and massive shifts in servicing, the need for strong technology and data experience within the Secondary department has never been greater. Combine this with M&A, a flurry of branch movement, a loss of talent due to RIFs and Secondary Manager transitions, there is no rest for the weary. Junior staff is now suddenly senior. New technology partners and platforms are rolling out for the first time in 5-10+ years for many and pipelines are in transition from platform to platform. 2023 is the year of ‘do more with less’ for those in Secondary leaving technology as the platform to streamline processes, maximize revenue and minimize risk. Matchbox is the only consulting company that can translate Secondary requirements into new technology offerings and workflows to ease the transition for companies. From assisting in Ginnie Mae SFPDM programming and testing to protecting locked pricing and COCs to implementing new technology partners or even building a suite of automated workflows via APIs, matchbox has all aspects of Secondary Marketing/Capital Markets support covered. We’ll even find some margin crumbs along the way so contact Frank Fiore to discuss your Secondary needs today.”

Conventional Conforming Changes

The FHFA acts, and the Government Sponsored Enterprises follow. The GSEs act, and aggregators follow. The aggregators act, and lenders follow. News announcements have slowed somewhat, but let’s see who’s doing what.

FHFA released a report providing the results of the annual stress tests that Fannie Mae and Freddie Mac (the Enterprises) are required to conduct under the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank Act).

Freddie Mac implemented changes to edits and feedback messages in Loan Closing Advisor® on August 8 to assist you as you prepare and test for the Uniform Closing Dataset (UCD) Phase 3B Critical Edits transition. Access release notes and updated resources to help guide your critical edits transition from the Loan Closing Advisor webpage and UCD webpage.

Freddie Mac launched CreditSmart® Essentials free financial education curriculum in Spanish. Expanded content, design, and platform to better meet the needs of Spanish-speaking consumers to help bolster educational efforts around the importance of building, maintaining, and using credit.

Pennymac is aligning with Freddie Mac’s Project Assessment Request (PAR) enhanced capability, announced in Bulletin 2023-15. Details are available in Pennymac Correspondent Announcement 23-52

Capital Markets

Yes, inflation is coming down somewhat. Yes, the FDIC driven sales of mortgage-backed securities prompted by the bank failures earlier this year are wrapping up. But mortgage rates haven’t done much on the downside. Let’s dive into why.

Last week’s economic data was focused on inflation, which remains well above the Fed’s preferred 2 percent target. Consumer prices rose during July at both the headline and core levels although the gains were widely forecasted. While core inflation was 4.7 percent over the prior twelve months, the last three months’ annualized gain slowed to 3.1 percent, an encouraging sign that the annual rate will continue to fall. It is encouraging to see inflation continue to ease without a significant contraction in the overall economy, increasing optimism that the Fed may achieve its desired soft landing. While costs for shelter and services continue to put upwards pressure on overall inflation, goods prices have been contracting. Core goods declined 0.3 percent in July, the largest monthly drop since March 2022. Costs for more expensive items, where consumers typically rely on financing, such as cars and household furniture, contributed to the decline in prices. Additionally, the percentage of small businesses reporting the need to increase prices fell to 25 percent in July, the lowest percentage since February 2021.

Mortgage and Treasury rates, however, rose after the release of a hotter than expected Producer Price Index (PPI) report for July on Friday. The report showed headline and “core” (ex-food and energy) PPI (actual 0.3 percent, expected 0.2 percent) were a touch on the high side. Core PPI accelerated to 0.8 percent year-over-year from 0.2 percent in June, representing the first sequential increase in 13 months.

To sum things up, the much-anticipated consumer inflation report on Thursday showed that the headline and core consumer price index was unchanged from June, bolstering bets among market participants that the Federal Reserve would hold off on further rate hikes. But hotter-than-anticipated producer inflation data on Friday played spoilsport for risk-on appetite, with both the headline and core producer price index for July rising from the previous month. Still, the overall picture points to a slowdown in inflation, and has even led to hopes of disinflation. There is a rising consensus among traders that the Federal Reserve will be able to deliver a so-called "soft landing."

This week? The U.S. Census Bureau will issue the July Retail Sales Report, which is forecast to show a slight acceleration from the pace seen in June. Traders will also be watching the release of Federal Open Market Committee Minutes from the Fed's July meeting for more clues on the direction of interest rates after the July CPI print calmed some nerves. Throw in some regional Fed surveys, business inventories, housing market data, industrial production / capacity utilization, as well as leading indicators, and that’s the week. Scheduled Fedspeak is currently light, though the minutes from the July 25/26 meeting will be released on Wednesday. Pertinent to mortgages, MBS Class B and C 48-hours are on Tuesday and Thursday. The week gets off to a quiet start with no scheduled economic releases of note today, and we begin the week with Agency MBS prices roughly unchanged from Friday night and the 10-year yielding 4.15 after closing last week at 4.17 percent. (Back in October the 10-year hit 4.34.)

Employment

“Stronghill Capital, LLC, an Austin, TX-based Wholesale and Correspondent Lender is hiring! If you are an Account Executive with 3+ years of experience and an existing book of Correspondents and/or Brokers that you want to introduce to a dynamic company with a responsive management team that strives to provide world-class service levels, sharp price execution, and is committed to building the Non-QM ‘private money’ space, contact Matt Brammer. As we continue to expand, we are open to discussions throughout much of the United States.”

“Feel like you’re on an island? If you're a business manager leading a hardworking staff and want more strategic guidance and additional resources to thrive, look no further. Nations Lending offers a full suite of tailored support for Producers. Our marketing services include social media management and personalized content creation, including video editing support, all at no cost to you. We also offer LO-friendly programs like Direct Submit, which allows loan files to be submitted directly to Underwriting, and ACE (Accelerated Competitive Edge) Approvals, our comprehensive preapproval program saving you time. If you’re interested in excelling with a company that is credited with multiple awards, including three-time Inc. 5000 winner, eight-time winner of Scotsman Guide's Top Mortgage Lenders, and three-time winner of Top Workplaces for Millennials by Fortune Magazine, then join our family. Become part of our nation and mission to make ‘home loans made human™’ and visit Nations Lending to learn more.”

The Department of Housing and Urban Development (HUD), in Washington DC, has an executive level vacancy for a Director of Single-Family Housing Program Development. The person selected will direct and manage three divisions: Home Mortgage Insurance Division; Valuation Policy Division, and Program Support Division. The Divisions share responsibility for the development of policy related to origination of single-family FHA-insured mortgages and loans. All applications must be received via USAJOBS.