Data Mining, Fair Lending, Tech Stack Products; Ginnie Stats; STRATMOR Ops Workshop; LO Comp and Profitability

I received this call yesterday from an LO friend. “Rob, I was talking to my ‘hair-apist’ last night, and I was telling her about how our industry has been a real roller coaster in terms of income for people and companies. People need their hair cut regularly, but certainly people don’t need home loans regularly. We’re all keeping our fingers crossed that 2024 is an okay year.” First off, hats off on the “hair-apist” line. (Is there also “hair-apy”?) Second, lenders are doing what they can to at least stay profitable. In fact, STRATMOR’s current blog is titled, “Adjusting Loan Officer Compensation to Improve Profitability.” Many lenders tend to move in a pack, based on rates, regulatory environment, or volumes, and despite an uptick in locks in November which resulted in decent December fundings for many, lenders find themselves back looking at overhead, tech and investor mix, and lead source. Regarding the latter, BankingBridge opined on its sponsored “top mortgage lead providers for 2024”: Bankrate, BestMoney, Credit Karma, LendingTree, Money, Movoto, NerdWallet, Own Up, and Zillow. (I know nothing about the merits or drawbacks of any of them, but perhaps they’ll give you some ideas.) 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

“Citi Correspondent Lending continues to grow both our client base and business volume, allowing us to attract top industry talent. We are excited to welcome industry veteran Christine Wagner to the Correspondent Lending sales team. Christine joined Citi in November as a Correspondent Account Executive, focused on growing Best Efforts and Non-Delegated clients in the Eastern half of the United States, including strategic relationships that support underserved markets. She brings a significant amount of experience in business development, client acquisition, and account management to this role, with a proven track record in identifying opportunities for territory growth. Learn more about how we can help support your business’ growth by contacting our National Client Services Team or completing our Prospective Correspondent Questionnaire.”

“The logjam that has kept lenders from investing in new technology may be breaking up. That’s the word we’re getting from some around the industry, including John McCrea at MortgageFlex. A long-time player in the space, the company released a companion mortgage loan servicing platform to its well-known LOS, and it’s been getting the company a lot of attention. Now, McCrea says that interest is converting into action. ‘We’ve been developing in this space for a long time, and we’ve never seen such a flurry of new customer contract signings,’ he said. News from the Fed that rates will fall this year may have something to do with it, but McCrea says his new customers are seeing the advantages and cost savings that come out of a common tech stack for both loan origination and servicing. See the platform for yourself by scheduling a demo, 1-860-460-7418.”

“What do you have at the top of your New Year’s resolution list? In the spirit of staying compliant in 2024, MQMR has put sharing our new suite of Fair Lending services at the top of our resolution list! With the growing interest and concerns around fair lending and fair servicing compliance, along with the fast-approaching March 1st HMDA deadline, MQMR is ready to help clients with any and all fair lending concerns! From policies and procedures, training, IT system controls, data analysis, regression testing, or support with your LAR submission… MQMR has got you covered! Check out our Fair Lending white paper to learn more about how to comply. Results happen over time, not overnight. Contact MQMR today to start improving your Fair Lending program!”

It’s hard to discount the impact of deploying the right strategy at the right time. Case in point: the Klondike bar. This century-old frozen treat was only available regionally until the debut of its iconic “What Would You Do for a Klondike Bar?” jingle in 1982, which helped launch the brand nationally and resulted in a well-known, beloved ad campaign that remains a mainstay in pop culture. While a catchy tune may not be the best strategy to fuel the quest for borrowers after last year’s slump, LOs are certainly asking themselves, “What can I do to drive more business this year?” MMI is giving away the answer in its upcoming LO strategy session on Jan. 17 from 1-2 pm ET, demonstrating tangible ways to leverage mortgage data with a special guest, Corey Knight, Director of Sales Training and Development at Silverton Mortgage. Reserve your spot here.

STRATMOR’s Ops Workshop

Forecasters are predicting modest growth in new and existing home sales in 2024, which means we can all look ahead with cautious optimism. Now’s the time to review your operations and prepare for this modest shift back toward normalcy. Senior Operations Executives: STRATMOR Group is hosting its virtual Operations Workshop next month, February 14-16, to help you do just that. Interact with STRATMOR advisors and your peer lenders to discuss improving operational efficiency, overcoming recent challenges and pain points, and current trends in mortgage operations. Contact STRATMOR Group to learn more and sign up.

Capital Markets

Here’s something that is growing: securitizing FHA and VA loans. Ginnie Mae’s mortgage-backed securities (MBS) portfolio outstanding grew to $2.52 trillion in December, including $28.7 billion of total MBS issuance, leading to $13 billion of net growth. December’s new MBS issuance supports the financing of nearly 95,000 households, including more than 47,000 first-time homebuyers. Approximately 76.3 percent of the December MBS issuance reflects new mortgages that support home purchases because refinance activity remained low due to higher interest rates.

The December issuance includes $27.6 billion of Ginnie Mae II MBS and nearly $1.02 billion of Ginnie Mae I MBS, including approximately $902 million in loans for multifamily housing. For the 2023 calendar year to date, Ginnie Mae supported the pooling and securitization of more than 620,000 first-time homebuyer loans. For more information on monthly MBS issuance, Unpaid Principal Balance (UPB), real estate investment conduit (REMIC) monthly issuance, and global market analysis, read the Ginnie Mae Disclosure page.

Looking at rates this week, inflation is front and center. We learned yesterday that the CPI (Consumer Price Index) accelerated 0.3 percent month-over-month in December after increasing 0.2 percent in November. From a year earlier, the CPI picked up to a 3.4 percent increase from 3.1 percent in November. However, the core CPI slowed to the lowest since the spring of 2021, prospects are good for inflation to slow further in 2024, and the modest pickup in headline inflation in December does not derail the overall downward trend in inflation still underway. The Fed is still on a path to lower interest rates this year, though a March rate cut is likely off the table, as Fed members have been trying to tell you for nearly a month. U.S. stocks and bonds whipsawed throughout the day as a result.

Treasury completed this week's mixed note and bond auction slate with a strong $21 billion 30-year bond reopening. Initial claims for the week ending January 6 decreased to 202k. Employers, in general, are still reluctant to cut employees from payrolls. That’s a positive as it relates to the outlook for labor and the economy, though not as it relates to the market's outlook for rate cuts. Mortgage rates were modestly changed in Freddie Mac’s latest Primary Mortgage Market Survey. For the week ending January 11, the 30-year mortgage rate rose 4 basis points to 6.66 percent while the 15-year rate slipped 2 basis points to 5.87 percent. Since mid-December rates have been confined to a relatively narrow range.

December producer prices (PPI) kicked off today’s calendar. Headline PPI was -.1 percent versus 0.1 percent expectations and no change in November. Ex-Food/Energy was flat, also lower than expected and versus 0.9 percent previously. The only other notes of interest for the bond market today will be remarks from Minneapolis Fed President Kashkari and bank earnings from JP Morgan, Bank of America, Citigroup, and Wells Fargo. We begin the day with Agency MBS prices roughly unchanged from Thursday evening, the 10-year yielding 3.96 after closing yesterday at 3.98 percent, and the 2-year down to 4.22.

LO Employment

“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!”

“Evergreen Home Loans is excited to share our 2024 vision for the Evergreen Cares Foundation. This year, we're deepening our philanthropic journey by collaborating with impactful organizations. Our approach goes beyond financial aid; it's about active participation and engagement. We encourage our team members to be hands-on in various community projects, from local fundraisers to supporting national causes. A key partnership this year is with Make-a-Wish, where we aim to bring hope and joy to children facing challenging health conditions. But our mission doesn't stop there. We're also committed to supporting food banks, educational initiatives, and environmental efforts. At Evergreen Home Loans, we believe in more than being your preferred lender: we're here to strengthen communities. Join us as we embark on this journey of making a real difference, one community at a time. To see all available job listings, visit Careers.”