Regulatory, Compliance, RIA, Accounting, AI Products; CFPB Penalty News; Credit/FICO and Investor Updates

I’m so tired of the mainstream press talking about the 2024 election, 10 months out. Given that the median age of U.S. citizens is about 38 years, one would think we could find someone under the age of 75 to be president, regardless of party affiliation. On the other end of the age spectrum, at age 34, Gabriel Attal became France’s youngest prime minister. France’s inflation rate is running at 3.7 percent, which I mention because inflation and the actions of central banks are linked, and the inflation rate and the CFPB are linked. (Whenever I mention the CFPB to my cat Myrtle she feigns indifference. Sometimes she even saunters away.) The CFPB announced the annual adjustments for inflation to the CFPB’s civil penalty amounts, as required by the Federal Civil Penalties Inflation Adjustment Act, as amended. This final rule is effective on January 15, 2024. Tomorrow we will have the Consumer Price Index, meant to broadly capture changes in the prices of goods and services; more tomorrow! (Today’s podcast can be found here, and this week’s is sponsored by Truework. By connecting every verification method into one platform, Truework helps lenders eliminate process disruptions, maintain a competitive borrower experience, and reduce the fiscal impact of verifying income.)

Lender and Broker Services and Software

Jonathan Spinetto COO & Co-founder at Nyfty Door, grew their business from 0 loan originations two years ago when he signed with TRUV, and is projected to hit 3,000 loans a month in 2024. NYFTY door sees conversion rates over 60 percent with Truv and is saving 60-80 percent over competitors! Contact TRUV today for your income, employment, insurance, and asset verifications.

How will you reach your goals in 2024? To lower costs and improve your margins on every loan, outsource to Computershare Loan Services (CLS). With CLS, you get an extension of your team that can support every part of your business, from your originations’ operation to your MSR retain/release strategy. Leverage their 20 years of experience and expertise to reduce costs, improve efficiencies, and mitigate risk. In this industry, you deserve a partner that has it all. Contact CLS to find out how they can help you reach your goals… in any market.

Production Managers are you starting 2024 off with the question, “How can I get all my originators working more like my top producers?” Then, you’re looking for the holy grail: habit duplication. Usherpa has been researching habits of highly successful loan officers for nearly 30 years, helping literally thousands of LOs increase production using habit duplication… through every conceivable market condition! How? Using data analytics (and lengthy history in the industry), Usherpa identified the most powerful habits of successful producers. Leveraging those trends coupled with Usherpa’s technology and commitment to customized training, you can ensure your team is primed to operate like the big hitters. Make your life a little bit easier and give your LOs the tools to duplicate top producers’ habits, learn how here. While you’re at it download the Usherpa eGuide “3 Habits of Top Producing Loan Officers (You Can Duplicate).”

Valuation professionals are tasked with being independent, impartial, and objective. But completely removing human involvement in the home valuation process is nearly impossible. Thanks to the increased use of artificial intelligence (AI), however, today’s technology can help lenders and investors assess property values more accurately and prevent valuation bias. Sign up for a complimentary webinar hosted by ICE to hear about AI and the future of home valuations. A panel of industry experts will discuss the ways AI-powered tools eliminate valuation bias. They’ll also cover how AI accelerates the valuation process, and ways you can look out for fraud when using AI in home appraisals. The webinar, Artificial Intelligence and the Future of Home Valuations, will be held on Tuesday, Jan. 23 from 2 -3 p.m. Don’t miss out on key insights: register here.

Don’t just “stay alive until 25” with Loan Vision, a software built by the mortgage industry for the mortgage industry, you can “do more in 24!” Customers on Loan Vision see improvements of 30 percent+ decrease in days to close the books, 20 percent+ reduction in accounting headcount, complete LOS to G/L automation, and improved reporting and visibility. Interested in learning how Loan Vision can help you run a more efficient and profitable company? Contact Carl Wooloff to schedule a call today.

Halcyon has introduced a pioneering RIA Services integration with Encompass Partner Connect, aiming to diversify lender revenue amidst a challenging market. With the decline of refinancing opportunities and high interest rates, Halcyon's initiative focuses on enhancing borrower-lender relationships through its new RIA Offering. This service enables loan officers to identify factors influencing home purchases during customer interactions, facilitating seamless referrals to RIAs for financial advice directly within Encompass. If a borrower signs up for services, a revenue share is provided back to the lender. Halcyon's advanced technology ensures all tracking, compliance, and details are handled efficiently for the lender. As buying a home is often the largest investment in one's life, early financial advice can be crucial for ensuring a stable financial future for new homeowners. You can read the full press release here. Want to learn more about the only Registered Investment Advisory solution on Encompass? Reach out today!

Compliance and Regulatory Tracking Products

Best Practices for Out-of-State Mortgage Lending from Ncontracts! As a mortgage lender, you’re already familiar with the Truth in Lending Act (TILA), the Home Mortgage Disclosure Act (HDMA), and the Equal Opportunity Credit Act (ECOA). However, mortgage lending is regulated by state laws as well, and that’s where things get complicated. In this latest article, experts from Ncontracts address the potential regulatory pitfalls mortgage lenders encounter when they grow their business in other states, plus ways to overcome them. Read the full article for more.

“Looking for an overview of all the significant legislation and regulations affecting lenders and servicers in 2023 and a preview of what’s to come in 2024? Download the annual regulatory and legislative update from Covius Compliance Solutions. Our latest report looks at what’s new in loss mitigation requirements, the CFPB’s crusade against junk fees, fair lending and servicing initiatives and growing scrutiny of AI and Chatbot usage. The report, titled “Navigating the Mortgage Industry Landscape: 2023 Review & 2024 Outlook,” also provides an analysis of major state lending and debt collection legislation and proposals. Get your copy today.

Credit and Investor News

In a combination of credit and lender news, CrossCountry Mortgage (CCM) has become an early adopter of FICO® Score 10 T, the most predictive score, to support origination and decision making for non-confirming loans. “Additionally, CCM is the first mortgage lender to commit to issuing mortgage-backed securities (MBS), exclusively based on FICO Score 10 T, enabling investors to update their guidelines to accept the most predictive score for MBS and allowing the $12 trillion MBS global market to have access to more powerful insights and information… This move will enable investors to update their guidelines to accept the most predictive score for MBS and allow the $12 trillion MBS global market to have access to more powerful insights and information. This commitment will be the first step for investors to familiarize themselves with the new score and realize the promised performance improvement. This first ever instance of FICO Score 10 T applied to an MBS pool will show investors, rating agencies, and other stakeholders a real-world example of the improved predictive performance offered by FICO Score 10 T.” “FICO is committed to assisting mortgage industry participants looking to transition to its most current model, FICO® Score 10 T. The FICO Score Migration Resource Center provides a detailed guide to support organizations through their score transition with key planning steps and activities, in addition to implementation best practices.”

Effective immediately, Pennymac is aligning with FHA ML 2023-17 supporting the use of rental income for single-family properties with an Accessory Dwelling Unit (ADU). For information, view PennyMac Announcement 23-88.

FHA and VA Increased Loan Limits for 2024 are addressed in PennyMac Announcement 23-87.

HighTechLending Wholesale introduced its new Jumbo Proprietary Reverse Product, the Platinum Reverse, available in three variations: Maximum LTV Fixed Rate, Adjustable Rate with a Line of Credit, and Reduced LTV with a lower Fixed Rate.

Plaza gives you the renovation programs your borrowers need to transform their current or future home to be “remote-ready” for work, school or anything life brings. Borrowers can combine the purchase or refinance of their home with the cost of its renovation, all in a single closing. Plaza offers the popular Fannie Mae® HomeStyle®, Freddie Mac CHOICERenovation® USDA Renovation and VA Renovation programs, as well as FHA 203(k) Standard and Limited.

The Federal Housing Administration announced that it will increase the maximum claim amount for their Reverse Mortgage Program (Home Equity Conversion Mortgage) in calendar year 2024 from $1,089,300 to $1,149,825 effective for case numbers assigned on or after January 1, 2024. Contact HighTech Lending to discuss HECM opportunities.

In November, VA published Transmittal of Change 38 to VA Pamphlet 26-7, Revised, VA Lender’s Handbook (07/27/2023) announcing revisions to VA Lenders Handbook Chapter 7 Topic 7, on Temporary Buydowns. For additional information, see AmeriHome Mortgage Product Announcement 20231208-CL.

Angel Oak’s DSCR Loan (Investor Cash Flow) program has been enhanced to accommodate an impressive 85 percent Loan-to-Value (LTV).

The Second+, Hometown Equity Mortgage’s standalone second boasts an impressive CLTV to 90 percent.

Capital Markets

Even with this week's mini-Refunding, it’s been a bit of a snoozer in the capital markets. Typically, mortgage and Treasury security pricing is a direct result of supply and demand, although Treasuries and MBS saw some brief buying yesterday in reaction to the day's strong $52 billion 3-year note auction and the market inched down in price ahead of the close. The November trade balance was better than expected, showing a deficit of $63.2 billion versus a downwardly revised $64.5 billion in October. Exports were $4.8 billion less than October exports while imports were $6.1 billion less than October imports. The drop in both exports and imports fits in with a weakening global economic environment. Separately, the NFIB Small Business Optimism Index rose to 91.9 in December from 90.6 in November.

Today’s economic calendar kicked off with mortgage applications increasing 9.9 percent from one week earlier, according to data from the Mortgage Bankers Association’s Weekly Mortgage Applications Survey for the week ending January 5, 2024. The results include an adjustment to account for the New Year’s holiday. Later today brings Wholesale inventories and sales for November, more Treasury auctions that will be headlined by $37 billion of reopened 10-year notes, and remarks from New York Fed President Williams. We begin the day with Agency MBS prices roughly unchanged from Tuesday night, the 10-year yielding 4.00 after closing yesterday at 4.02 percent, and the 2-year at 4.34.

LO Jobs

“Embarking on a new professional journey shouldn't mean pressing pause on your success. At Homestead Funding, we support seamless transitions for our newest team members while safeguarding your uninterrupted business growth. Our dedicated Onboarding Team provides you with program knowledge, marketing materials, and essential tools, paving the way for your accomplishments. As we approach our upcoming Sales Summit this Spring, our Loan Originators will have the chance to delve into the latest industry technology and strategies presented by leading mortgage experts. Discover how Homestead facilitated a smooth transition for Carrie Hamel and her team. Within just a year, Carrie achieved top-producer status, earning a coveted spot in our 2023 President’s Club. Ready to propel your business forward with us? Contact Michele Teague at (518)-368-1494 to explore how Homestead Funding can be your mechanism for success!”

“Okay, here's what I came up with...New Year, New Career at PrimeLending. Now is the perfect time to take charge and position yourself to thrive in 2024 and beyond. Contact us today to set up a guided tour of our best-in-class tech stack that’s helping our LOs build their personal brand and close more loans. Schedule a time to meet with PrimeLending’s dynamic, engaged leaders, the driving force behind your future success. Get to know the camaraderie and passion that define our award-winning culture, one reason over 30 percent of our workforce has called PrimeLending home for more than a decade. Seize this moment and explore making the change that will propel your career to the next level. Your future awaits, and it all starts by connecting with Nic Hartke. The time is now!”

Fairway Independent Mortgage is hosting a Virtual Fairway Day on Thursday, January 18, at 2PM CT. "Want to know what makes Fairway the best mortgage company to work for? Now’s your chance! Join us and learn everything you need to know about Fairway's products, platforms, training and coaching directly from Fairway CEO, Steve Jacobson, President of Retail Sales East, David Lazowski and other executives​."