DPA, Fee Collection, PPE, AI Servicing Tools; California and Rain; STRATMOR on Compensation

Two vultures are in a field, eating a dead clown. One vulture says to the other, "Does this taste funny to you?" The last thing you want to hear about your company is that it “preyed upon” customers, which is the opposite of funny. “Don’t do the crime if you can’t do the time”: A federal court has issued an order banning the operators of the Home Matters USA mortgage relief scam from the telemarketing and debt relief businesses and requiring them to turn over $19 million as a result of a lawsuit by the Federal Trade Commission and the California Department of Financial Protection and Innovation. Named were Home Matters USA, Academy Home Services, Atlantic Pacific Service Group, and Golden Home Services America, and the owners of the companies, Michael R. Nabati, Armando Solis Barron, Dominic Ahiga (also known as Michael D. Grinnell), and Roger S. Dyer… taking millions of dollars from thousands of struggling homeowners seeking mortgage relief. At the other end of the “beneficial” spectrum, the MBA’s Bill Killmer, SVP for Legislative and Political Affairs, will be interviewed tomorrow on L1’s Roundup. (Found here, this week’s podcast is sponsored by Truv. Truv lets applicants verify income, employment, assets, insurance, and switch direct deposits. Unlock the power of open finance, with Truv. Hearn an interview with Rice Park Capital Management’s Chris Bixby and Candor’s Mark Hinshaw on the recent partnership between the two companies and the future of AI underwriting.)

Lender and Broker Services, Products, and Software

Will you be at ICE Experience? The Down Payment Resource (DPR) team can show you which of the nation's 2,200+ DPA programs are available in your service footprint and how we can make it both easy and profitable for lenders to support these initiatives. A study by the Urban Institute and Down Payment Resource has unveiled an eye-opening opportunity gap in the utilization of down payment assistance (DPA) programs. Astonishingly, 43.6 percent of residential purchase loans in the top 10 MSAs qualified for at least one DPA program, with this figure soaring to 79.8 percent and 81.9 percent for FHA and USDA loans. Wilder still, 30.7 percent of denied loans could potentially have been salvaged with DPA. Lenders of all stripes use Down Payment Resource to profitably support DPA at scale and across geographies. DPR will be making its debut appearance at ICE Experience 2024 at kiosk #22, where we’ll be breaking some big news. Stop by or schedule a meeting with the DPR team to get the full scoop.

More lenders who never serviced or relied on a subservicer are starting up serving operations to capture additional revenue. It’s working because the industry finally has access to cost effective, quickly deployable cloud-native servicing software. You can see the industry’s first unified origination and servicing platform with MortgageFlex Systems in Booth 400 at the MBA Servicing conference going on today in Orlando. “After seeing a demo of the platform, I was blown away,” says Melissa B. Smith, Vice President at Liberty Home Mortgage Corp. Liberty is now using the MortgageFlexONE servicing system. “The staff at MortgageFlex have years of experience in servicing and they are happy to share their knowledge,” Smith said. “They have built a system that makes it almost impossible to make mistakes.” See it for yourself, the team will be providing demos in Booth 400 or text 1-860-460-7418 to schedule a meeting with the MortgageFlex team.

Zoral: The Automation Platform for Mortgage! For the past 20 years, Zoral has created, implemented, and refined an innovative, AI-powered automation platform for mortgage, banking, and finance. Whether deploying Zoral’s mortgage automation solutions (like Underwriting Automation Utilities or Warehouse Line Automation) or utilizing the platform for bespoke configurations, Zoral is the Automation Platform for Mortgage. Boost your team’s productivity and liberate them from tedious, repetitive, and error-prone tasks. Automatically gather, sort, and gain value from data and documents with the platform’s state-of-the-art OCR and document categorization. Graduate beyond needing to continuously adjust headcount at every turn of the market with a platform built with the elasticity needed to handle even the most unpredictable environments. Zoral’s proprietary no-code/low-code, AI-powered platform is designed and built in-house and rapidly implemented to deliver solutions across the mortgage lifecycle. To learn more about Zoral Automation Platform and Zoral’s mortgage automation solutions, contact Peter Sandler.

Free boozy milkshakes + 80s nostalgia only with Sagent! Get on the list for the most radical MBA Servicing party. Think Members Only jackets, parachute pants, lots of neon… oh and like, ‘fer sure’ some killer 80s hits. Sagent will be shaking it up this year at MBA Servicing ‘24, so you’ll want to get on the list for our tubular party at JoJo’s Shake Bar on 2/21 @ 7 PM ET. You’ll be ‘shook all night long’, because this party will be ‘just like heaven.’ Click the link to reserve your shake…wait, we mean spot, today.

BeSmartee announces the strategic integration of its highly configurable point-of-sale solution Bright POS with Polly, leading provider of innovative mortgage capital markets technology and operator of the industry's first cloud-native, commercially scalable PPE. This highly anticipated API integration offers lenders a competitive edge through a faster and more efficient loan origination process. Integration highlights: 1.) Eliminates duplicate data entry, enhances data integrity, and augments speed-to-market of competitive offerings; 2.) Highly configurable products meet the unique needs of borrower profiles and preferences, delivering a truly unified and tailored customer experience; 3.) Instant access to Polly's PPE for loan officers to efficiently manage pricing on individual loans. "The industry's response to our PPE and approach to lender success has been nothing short of remarkable," explained Parvesh Sahi, Polly CRO. "BeSmartee shares a mutual commitment to lenders' success… Together, we will continue to power a more seamless, transparent, and efficient mortgage experience for all."

Think of all the manual things you have to do when collecting upfront fees from your borrowers... Get your borrower's credit card number, transcribe it into a virtual terminal, update the LOS, reconcile the accounting. What if all that was automated? Fee Chaser by LenderLogix is integrated into Encompass® by ICE Mortgage Technology™ and automates fee collection end-to-end all while giving the borrower a great experience.

TPO Products for Brokers and Correspondents

“Looking for FHA 100 percent financing with competitive pricing and ease of delivery? All roads lead to ESSEX CORRESPONDENT and our Down Payment Assistance (DPA) product. Become a fully delegated and underwrite/fund your own 100 percent CLTV purchase product. Conforming and HIGH BALANCE, FHA 1st 96.5 percent LTV with two 3.5 percent 2nd mortgage options; 0 percent Forgivable or a 10 year Fully Amortized. FICO low as 600. 2/1 Buydowns, No DTI limit, AUS approval required, 2. One set of guidelines is available in 48 states. No first-time home buyer requirement. No 3rd party underwrite allows you to close as quickly as your team can close. Email Kim Schenck or contact your Account Executive today and get signed up!”

STRATMOR on Compensation

Lenders, how have rising rates and shrinking margins impacted your 2024 compensation plans? STRATMOR Group’s Spring 2024 Compensation Connection® Study provides valuable comparisons on compensation components, incentive plan structure, compensation percentiles, and more. Three-year trailing data is also included with most data points. Find out how you compare to your peers by participating. Results will only be available to participants, so register today! Questions? Email compconnection@stratmorgroup.com.

Disaster Updates

Given that 20-25 percent of the nation’s mortgages come from California, seeing a disaster declared there is worth noting for lenders and servicers alike. FEMA announced today that federal disaster assistance has been made available to the state of California to supplement recovery efforts in the areas affected by severe storms and flooding, January 21-23, 2024. The President’s action makes federal funding available to affected individuals in San Diego County.

“Assistance can include grants for temporary housing and home repairs, low-interest loans to cover uninsured property losses and other programs to help individuals and business owners recover from the effects of the disaster. Federal funding is also available on a cost-sharing basis for hazard mitigation measures statewide. Individuals and business owners who sustained losses in the designated areas can begin applying for assistance by registering online at www.DisasterAssistance.gov, by calling 1-800-621-3362 or by using the FEMA App.”

Other states are feeling the impact of severe storms as well. There was West Virginia Flooding FEMA (DR-4756-DV) and Michigan Severe Storms, Tornadoes, and Flooding (DR-4757-MI).

FEMA declared that federal disaster aid with individual assistance has been made available to Michigan counties: Eaton, Ingham, Ionia, Kent, Livingston, Macomb, Monroe, Oakland, and Wayne to supplement recovery efforts in the areas affected by severe storms, tornadoes, and flooding from August 24, 2023, to August 26, 2023.See the tables shown in AmeriHome Mortgage Announcement Number 20240203-CL for a summary of disaster inspection requirements.

PHH Mortgage let borrowers and clients know that “In addition to the previously declared counties listed below, the following disaster declaration is being issued or modified pertaining to:

Michigan DR-4757: New Disaster… Please reference the announcement for all disaster declared counties, requirements, procedures, and conditions.”

On 1/30/2024, with DR-4756, FEMA declared federal disaster aid with individual assistance has been made to five West Virginia counties; Boone, Calhoun, Clay, Harrison, and Kanawha affected by severe storms, flooding, landslides, and mudslides from 8/28/2023 to 8/30/2023. See AmeriHome Correspondent Disaster Announcement 20240112-CL for inspection requirements.

Capital Markets

Maximize your return on every loan with better secondary pricing and industry-leading technology. Now more than ever, lenders need solutions that allow scale while reducing operational costs and increasing revenue per loan. With Maxwell Capital, lenders can access competitive secondary market pricing on a wide array of products, including non-QM and jumbo, and full-service fulfillment support on both wholesale and mini correspondent offerings. Plus, Maxwell Capital customers gain access to Maxwell Point of Sale - a digital mortgage platform with built-in business intelligence to track and benchmark performance. Schedule a call with Maxwell today, and start doing more for your bottom line.

Although the news does not impact home loans directly, it still is a notable capital markets event. Capital One is acquiring Discover Financial Services, combining two of the largest credit card companies in the U.S. Capital One, with $479 billion in assets, is one of the nation’s largest banks, and it issues credit cards on networks run by Visa and Mastercard. Acquiring Discover will give it access to a credit card network of 305 million cardholders, adding to its base of more than 100 million customers. And Walmart is buying U.S. TV maker Vizio.

While the Federal Reserve has made a lot of progress over the past two years, last week proved that interest rates will not cooperate by falling in a linear fashion. High interest rates were not helped by sticky consumer prices and another hot inflation print in the form of the Producer Price Index to close last week, extending this year’s bond market selloff. CPI came in higher than expected as core prices rose 0.4 percent during January, while the prices paid to U.S. producers rose in January by 0.3 percent, more than forecast.

The American economy continues to defy recession predictions as the Fed chases its 2 percent inflation target. Atlanta Fed President Bostic said there’s no rush to cut rates with the labor market and economy still strong, cautioning that it may take “some time” to be sure inflation is heading sustainably toward the Fed’s 2 percent target. Digging into the data reveals that goods inflation was more or less at pre-pandemic levels while services inflation increased 0.7 percent during the month. Significant drivers of that inflation were owner’s equivalent rent, medical services, and travel. However, expectations are that shelter prices will ease in the coming months based on other leading indicators. In response, the market shifted expectations for the timing of the first rate cut out to summer.

Seasonally adjusted data implies a continuing housing shortage ahead. Housing starts plummeted 14.8 percent in January to a 1.33 million annual rate, well below expectations, as inhospitable weather delayed many projects. Fortunately, over the last year, single-family permits were up almost 36 percent since hitting a low in January 2023.

January's housing starts also continued to show a shift from apartment to single-family home construction, with ground broken on more than three new single-family homes for every single unit in a building with five or more units. Multifamily construction is down 27 percent year-over-year and now sits at one of the lowest monthly levels seen over the past decade as the mix of permits is changing pretty dramatically. The Mortgage Bankers Association Builder Application Survey data for January 2024 shows mortgage applications for new home purchases increased 19.1 percent compared to a year ago. Compared to December 2023, applications increased by 38 percent.

This week is light on economic data: February flash S&P Global PMIs and the minutes from the January 30/31 FOMC meeting being the highlights. The markets are back open today, and besides the M&A news above have a couple secondary data points, including the already-released Philadelphia Fed non-manufacturing indices for February and January leading indicators due out later this morning. Class D 48-hours is also today. We begin the post-holiday trading week with Agency MBS prices slightly improved from Friday night, the 10-year yielding 4.27 after closing Friday at 4.30 percent, and the 2-year at 4.60.

Employment, and a Farewell

A well-capitalized IMB, based in the NJ/PA tri- state market, is seeking Loan Officers, Sales Teams, or possible acquisition opportunities of small to midsize IMBs in NJ, NY, CT, FL, PA, while expanding in MD, DC, VA, NC and SC. The IMB’s focus is a highly personable and high touch experience for LOs and Realtors. Organizationally lean, very competitive pricing, a wide array of products, and much higher LO Comp than what is offered by other larger IMBs. The focus is to attract serious loan officers who want an unparalleled service, where your voice matters and you have a seat at the table in growth. If interested, message Chrisman LLC’s Anjelica Nixt for a confidential discussion. (Please specify the opportunity.)

Fairway Independent Mortgage is hosting a confidential Virtual Fairway Day this Thursday, February 22, at 2PM CT, 3PM EST. "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​."

Thank you to one of our readers for alerting us to the passing of industry veteran, John McDade, a remarkable partner who was one of the country’s premier voices for veterans and active service members. “As a veteran himself, John dedicated each possible moment not only to his family, but also to training and supporting our industry with respect to VA financing, calling VA financing, "The Greatest Loan on the Planet." Over nearly four decades, John traversed the U.S., most recently with Success Mortgage Partners as Director of VA Lending but also iServe Residential Lending, collaborating with originators, real estate agents, and veterans, imparting knowledge and offering his unwavering support. Thoughts and prayers to his wife, Cathy, and the entire family.