DSCR, FHA DPA, LOS, Warehouse, AI, Social Media Products; NAR Settlement Updates
Lenders are refinancing borrowers who took out intermediate ARMs 3, 5, or 7 years ago and whose rates have gone up. Some here in Las Vegas, walking around humming this tune while at the ICE and Lender Toolkit event, will say that adjustable-rate mortgages are a gamble that paid off from 1982 through 2021 but not now. Las Vegas is packed, and yesterday I asked the kid working behind the counter at McDonalds if the Shamrock Shakes were made with fresh shamrocks. He left to go ask the manager. Yikes. Mickey D’s employees make $14-17 an hour, certainly under the area’s median income. I mention this because 1,200 miles to the north, in Vancouver, BC, for a lesson in affordable housing, the Squamish First Nation has reserve land in the heart of Vancouver and is using its authority to build large, dense, affordable urban housing via an 11-tower, 6,000-apartment development over 10 acres of land. Many NIMBYs in the beachfront neighborhood next to the reserve are upset about the development. And that’s not all: The Musqueam, Squamish and Tsleil-Waututh Nations are planning a 12-tower project on the west side. (Found here, this week’s podcast is sponsored by Visio Lending. Visio is the nation's premier lender for buy and hold investors with over 2.5 billion closed loans for single-family rental properties, including vacation rentals. Today’s has an interview with Gateway First Bank’s Steven Plaisance on priorities for mortgage executives and the importance of advocacy groups.
Lender and Broker Services, Products, and Software
Social media is quickly becoming the preferred search engine for Gen Z and Millennial borrowers. Are you well positioned to capture their business? See how NFM Lending leveraged Surefire’s Power Video feature to strategically build partnerships with influencers and generate social media content focused on borrower education and genuine stories. After launching this influencer division, they are attracting both new and existing homeowners, while also seeing thousands of leads come in per month. Read the case study here for the full story.
“Discover our latest AI breakthrough: AskMax unveiled at ICE Experience 2024; visit Booth #227 to learn more! Going to ICE Experience 2024 in Las Vegas on March 18-20? Join us at Booth #227 as we unveil the latest Maxwell innovation: AskMax, your best friend in mortgage reporting. Explore firsthand how AskMax, our exclusive AI technology within Maxwell Business Intelligence, empowers users with instant, easily understandable responses to industry and company data inquiries. Whether you need insight into top loan officers, application volumes, processor efficiency, expiring locks, or pull-through rates, AskMax delivers actionable intelligence at your convenience. At Maxwell, we pride ourselves on being the trusted choice for Encompass users seeking comprehensive solutions across the mortgage lifecycle. We're eager to connect with you at EX24 and shape the future of mortgage lending together. See you at Booth #227!”
Forta Solutions has funded its first loan through Agility, a new Warehouse Lending technology. The funding of their first loan affirms warehouse lenders have a viable alternative to legacy technologies. Agility, a warehouse lending platform that launched in October 2023, is designed to streamline the lending process, and empower financial institutions. With real-time monitoring, intelligent analytics, and endless integration capabilities, Agility sets a new standard of reliability in the lending landscape. Forta is the perfect combination of seasoned executives and modern technology. For more information or to schedule a demo please contact Claudia Bridges.
Now is the time for a LOS that can do it all. Mortgage Machine™ is an out-of-the-box, all-in-one LOS designed to accelerate lenders’ operational velocity and support an end-to-end digital origination process. Created by eMortgage pioneer Jeff Bode, Mortgage Machine’s key platform features include AI-powered Data management and task automation, a scalable cloud-based infrastructure, flexible APIs, pre-configured workflows for retail and TPO channels, integrated document management and POS functionality. Mortgage Machine also offers all-in-one eClosing capabilities, including an eClose room, eNotes, eVault and RON, and utilizes MISMO SMARTDoc® data and security standards. If you’re ready to harness the time- and cost-savings digital mortgages deliver, register for the live Mortgage Machine demonstration at 12 pm CT on April 4. Can’t make it? Schedule some time with the Mortgage Machine team.
Wholesale and Correspondent Options
“First Colony Mortgage Corporation (FCM TPO) is excited to announce our new branding, as well as new and enhanced products, driven by improved technology and dedication to providing the best service possible. "We are confident that these enhancements will provide greater value to our partnerships and look forward to the opportunity of serving our partners both new and old," - Nectar Kalajian, Managing Director. Effective today: we are in the Loan Sifter and Lender Price, we will no longer be known as an Agency Only Investor, we have improved our Portal to price with the ability to submit and lock Agency/Jumbo/Non-QM within seconds, you can price your loans 24/7, you can earn points and improve your Borrower Rate Lock Commitment, and you can utilize our Scenario Desk. We have much more to come in the near future! If you are not approved with us or want to help increase your production, please reach out.”
“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 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!”
“Quarter 1 is almost gone. With 3 quarters left, now’s the time to discover Axos Bank’s highly competitive rates to expand your borrowers’ mortgage options via No-Ratio DSCR, Closed-End 2nds to Super Jumbo portfolio loans to $30MM+. Join us on March 19th for an exclusive webinar on Expanded and Express mortgage products or visit the WCPL website to see all our product offerings. We’ll be at the Housing Wire conference in Scottsdale, AZ, April 21-24. To chat with us, schedule a meeting with our National Sales Director, J. Shoop. And if you are also looking for a Residential Warehouse line from $10MM to $250MM, contact the Axos Bank Warehouse Lending team. Please visit the warehouse website or schedule a call today with Eric Nelepovitz (888-764-7080) to receive strategic direction that can help grow your business.”
NAR Settlement Conjecture Continues
Last year, the NAR was sued over Realtor commissions, and last week agreed to pay $418m to settle lawsuits, plus change the rules on how 1.5m NAR Realtors get paid. The reaction from the proposed settlement of the National Association of Realtors lawsuit ranges from “it’ll change the entire commission and lending pricing structures” to “it’s no big deal and the industry will shift to negotiated commissions with barely a hiccup.” Assuming that the settlement is approved by a federal court, the ultimate result will probably be something in-between; obviously the real estate and lending industries are interested given that about five million homes sell per year, and of those 3.7 million are financed.
Seller commissions will probably be cut in half from 5-6 percent. This may happen because the NAR said they’ll no longer require listing agents representing sellers to offer a commission to agents who bring in buyers. Unfortunately for the efforts to improve things for first-time homebuyers, they will probably be hit the hardest after saving up money for a down payment since they may pay more to agents representing them to find and close on homes. A buyer’s agent will be more likely to ask a buyer to sign a commission agreement before working with them.
Julian Hebron of The Basis Point penned a good piece titled, “Are Homebuyers Hit Hardest By Landmark Realtor Lawsuit?”
Meanwhile, lenders continue to attempt to help buyers. For example, Planet Home Lending is offering two innovative home loans targeting challenges faced by today’s homebuyers, Purchase EDGE and Cash 4 Homes. “Planet’s Cash 4 Homes levels the playing field for buyers who find themselves competing against all-cash homebuyers. Not just for current homeowners, first-time homebuyers can also use it to secure their dream home. Homebuyers have the choice to waive traditional financing and appraisal contingencies. If the financing is delayed, the homebuyer has the security of a cash backup waiting at closing. Purchase EDGE and Purchase EDGE Guarantee offer move-up homebuyers unique advantages such as a guaranteed buyer for current home, the option to stay in the current home for up to 30 days post-closing if new construction or other closing issues cause delays. The ability to make a purchase offer without certain contingencies, and qualification benefit for new home loan.”
Capital Markets
There’s a lot of bad news out there, so let's focus on some positives. Yes, Inflation is proving stickier than many anticipated, but the recent pickup isn’t likely to shift Fed policymakers’ forecasts for three interest-rate cuts this year and four in 2025. We will get a fresh set of economic projections and a new “dot plot” when the Fed meets this week. We are beginning to see more housing inventory hit the market. It’s obviously very metro-dependent, but new listings have increased 16 percent year-over-year and active inventory is up 22 percent compared to a year ago. Meanwhile the median listing price is down 0.6 percent versus 2023. Last week closed with a slow data day as market participants looked ahead to the FOMC meeting this week.
This week, the market will be focused on the upcoming Federal Open Market Committee meeting and the following press conference for any indication that the committee feels their desired employment and inflation goals are in balance. While inflation has certainly trended lower over the last year, the latest reports suggest that trend has flattened as services inflation continues to remain elevated due to strong consumer demand. Retail sales in February showed spending on goods was flat in February and weaker than forecast. The pace of housing inflation eased slightly in February as owners’ equivalent rent increased 0.4 percent, slower than the 0.6 percent increase in January.
Ultimately, the timing and pace of any interest rate cuts are in the hands of the Fed, but the markets are now forecasting the first cut to come in June. The markets have already gotten ahead of the Fed this year (let alone multiple times last year) and it remains to be seen if the anticipated rate cut in June gets pushed further into the year.
This week there is a laundry list of central bank meetings, including the U.S. Federal Reserve’s, which concludes on Wednesday and will include an updated Summary of Economic Projections. Other central banks during the week include the BoJ and RBA tomorrow, and SNB, Norges Bank, and BoE on Thursday. The domestic economic calendar in terms of data is relatively light with several housing-related reports, leading indicators, and PMI flashes. Besides the usual Treasury bills including the 1-year, Treasury will auction $13 billion reopened 20-year bonds tomorrow and $16 billion reopened 10-year TIPS on Thursday after the Fed. Fedspeak is also set to resume with Fed Governor Bowman, Vice Chair Jefferson and Atlanta’s Bostic all scheduled to speak on Friday.
The week gets off to a quiet start with one data point today, NAHB Housing Market Index for March that is due mid-day. We begin the week with Agency MBS prices little changed from Friday’s close, the 10-year yielding 4.29 after closing last week at 4.30 percent (up 21 basis points from where it began the week), and the 2-year at 4.71.
Jobs
“While other companies burn through their AE workforce every 2-3 years, why not join a team that actually cares about your long-term growth and stability: MAI Wholesale! Are you looking to join a group that values human connection just as much as innovative technology? "It's a rough market" is not an excuse for poor support and outdated technology. For 30 years, MAI Wholesale has been helping our AEs foster strong, consistent, and lasting broker relationships. At MAI, we prefer measured growth and developing existing markets. Hearing the phrase “We are rapidly expanding!,” should raise a concern about stability and your access to resources. We are looking for AEs in Territories East of the Mississippi (Texas Included!). We are expanding like the SEC. Explore career opportunities with MAI Wholesale! Connect with Kevin Green, VP TPO Production to learn more.”
“Loan Officers, it's time to upgrade to Market Place Mortgage. We combine advanced technology with industry expertise to enhance the loan officer experience, and the pay is great! We're a lender and broker, allowing you to choose the best path for each client. Our in-house team provides fast, reliable support for conventional, governmental, and non-QM loans and extensive broker options. Our expert underwriters simplify income calculation and set new standards with same day turn times. Loan Officer Assistants handle documentation and application submission, freeing you to focus on loan origination. Looking to grow? MPM offers mentoring programs for professional development and industry-leading compensation packages. Our robust marketing strategies, including advanced CRM techniques and targeted ads, help expand your client base. Don't settle for the outdated, upgrade to Market Place Mortgage. Connect with Gavin Beal, VP Retail Production to learn more.”