Commercial, HELOC, Productivity, VOIE, LOS, FICO 10T Tools; Credit Tool Webinar; LO Comp

Summer has officially come and gone; the autumn equinox was yesterday. Columbus Day, Halloween, Veteran’s Day, and Thanksgiving are in the coming months. Here in Chicago (which knows how to celebrate) I spent some time in preparation with Garth Graham of STRATMOR who is noticing the market reactions to the decline in interest rates. Many lenders are encouraged that this could be a bump up for purchase business, but Garth believes there could be a divide in who benefits from the pickup in the purchase market. Among his observations is that recent legal developments affecting the real estate agents may result in consolidation in that business even as the business itself picks up, which he explains in this article. While we’re on legal issue implications, the Loan Originator Compensation Rule has been a thorn in the side of the mortgage industry since 2011 and in his latest Mortgage Musing, comparing LO Comp to the Berlin Wall, attorney Brian Levy again criticizes this uniquely anticompetitive price fixing rule that prevents mortgage commission negotiation at the expense of all consumers. (Today’s podcast is found here and this week’s is Sponsored by Silk Title Co. Silk is for lenders who have centralized operations, are tech driven, process oriented, focused on the borrower experience, standardized in their approach, and most importantly… collaborative. Listen to an interview with ALTA’s Chris Morton on a the previously rejected Fannie Mae pilot program that would have waived the requirement for lender’s title insurance on certain refinances under the guise of lowering housing costs.)

Lender and Broker Software, Services, and Loan Programs

“Lenders face the constant challenge of managing complex data and making swift, informed decisions to maximize profitability on every loan transaction. At Optimal Blue, we develop AI-powered capabilities to solve the real-world challenges that lenders face. One example is the Projections Assistant in our CompassEdge hedging and loan trading platform. Projections Assistant predicts the real-time impact of various factors on the risk profile of a hedged mortgage pipeline, including originations, fallout, and loan sales. By analyzing historical data and recent position activity, this tool provides reliable predictions, streamlines forecasting, minimizes human biases, and reduces reliance on manual research. This means you can get more accurate and timely insights into future performance, allowing for more effective risk management and strategic decision-making. Stay ahead of the competition with Optimal Blue’s AI-powered solutions. To learn more about how Optimal Blue is putting AI to work to maximize your profitability, reach out to Sales@OptimalBlue.com.”

Last week for Maxwell Capital September Savings: Save $300 on admin fees! Looking for ways to pass savings on to your borrowers? Take advantage of Maxwell Capital’s limited time $300 discount on admin fees between now and Sept 30. 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 agency, jumbo and non-QM across wholesale, delegated and non-delegated delivery options. Schedule a call with the Maxwell team today and start doing more for your bottom line.

Primis Mortgage has joined forces with Informative Research to receive FICO® Score 10 T, the newest credit score from FICO, whose advantage lies in its ability to provide a more nuanced and dynamic view of how consumers manage credit over time. The expected net result is more consumers will qualify for mortgage loans, given that FICO® Score 10 T provides up to a 5 percent lift in approval rates. Primis will work with their investors so that they can begin to take advantage of selling their loans on the secondary market, leveraging the FICO® Score 10 T advantage! Discover how you can elevate your business using this powerful new score!

Big news out of Dark Matter Technologies this morning: The mortgage tech heavyweight announced it has added the NOVA LOS to its product lineup alongside the Empower LOS. In a game-changing strategy, these two distinct platforms will now operate under one united leadership, expanding our ability to offer comprehensive solutions for lenders of all sizes. The NOVA LOS is tailored for small to mid-tier-volume lenders that need a modern, plug-and-play system with minimal administrative or testing requirements. The Empower LOS is designed for mid-large lenders with more complex needs, who desire extremely configurable exception-based workflows. By bringing the Empower LOS and the NOVA LOS under common leadership, we’re ensuring that the market has access to a full spectrum of tools designed to help lenders grow, adapt, and succeed. Explore the NOVA LOS and the Empower LOS on Dark Matter’s newly imagined website today.

If we can get 30 to 40% of consumers to use their credentials to login to Truv at a 90% cost savings, is that successful? “I would argue yes.” says Juliet Leibon, Senior Director, Operations & Strategic Partnerships at Better Mortgage. Hear how Better and Truv are revolutionizing the VOIE process from getting stakeholder buy-in to streamlining onboarding and adoption. Learn more.

How much could your business gain from up to a 28% boost in leads? A recent study by MarketWise Advisors revealed that customers using ICE’s comprehensive suite of sales, marketing, and borrower engagement solutions experience a significant increase in leads and a reduction of up to $281 in sales costs. Discover how this market-leading technology can enhance your sales productivity, lower customer acquisition costs, and provide an exceptional borrower experience, all through world-class automation integrated within the Encompass® platform. Click here to learn more.

Correspondent and Broker Products

“Arc Home is excited to announce the October 9th launch of HomeEQ, a fully digitized Home Equity Line of Credit (HELOC) solution. With HomeEQ, brokers can offer clients a seamless, all-digital process, from application to funding in as little as 5 days. With less than 3 weeks until launch, now is the time to update your broker agreement or become a partner. HomeEQ provides a fast, flexible way to tap into the trillion-dollar U.S. home equity market and expand your business. Visit our YouTube page for an inside look at HomeEQ, follow us on LinkedIn for updates, or contact Shea Pallante directly to see how HomeEQ can benefit your business. With HomeEQ, it’s equity made easy.”

FALL into MORE Business with September Price Improvement Specials from LoanStream on Non-QM, Prime and Closed End Seconds. Through 9/30/24. 50 BPS on all Full/Alt-Doc Non-QM Loans with FICO ≥ 700 and LTV ≤ 70%, 50 BPS on all DSCR with a minimum 3YR prepay penalty, DSCR ≥ 1.0, and FICO ≥ 660. 37.5 BPS on FHA Standard Balance and FHA Streamline, and VA IRRRL (can be combined with Select for another 35 BPS) 25 BPS on FHA/VA/DPA for all FICO scores (Excludes CalHFA, FHA Standard Balance and Streamline, and VA IRRRLs. Can be combined with Select for another 35 BPS). 25 BPS on ALL Closed-End Seconds. Restrictions apply. Contact your AE. Non-QM Specials available with LoanStream Correspondent, talk with your Regional Sales Executive. LoanStream introduced 2025 Confirming loan limits up to $802,650! Loans must have a submission date on or after 9/17/2024.

Sponsored Credit Score Event

Lenders One webinar on Tuesday, September 24th! See a live demo of ScoreNavigator’s Mortgage Action Plan™! ScoreNavigator’s Mortgage Action Plan™, the newest entrant in the credit optimization space, is now available through L1 Credit, powered by MeridianLink. Join Lenders One on Tuesday, September 24th at 2:00 PM ET to see a live demonstration of ScoreNavigator’s Mortgage Action Plan™ and Simulators conducted by Ryan Bresse, VP of Business Development for ScoreNavigator® and moderated by Justin Demola, CMB, President of Lenders One. You'll learn how this transformative tool enhances the efficiency and effectiveness of the mortgage pre-approval process and provides you with the specific data points to create an action plan to maximize your borrower’s credit scores. By having access to a detailed analysis of an applicant’s credit health, loan officers can easily identify viable candidates for mortgage approval and increase productivity. Register now at LendersOne.com to see how it works! Questions about L1 Credit? Click here.

Capital Markets

The Federal Reserve got aggressive last Wednesday, beginning its new easing cycle with a bang. The super-sized 50-basis point rate cut was geared towards a soft landing, with the eyes of the FOMC firmly trained on the labor market. It took investors a while to digest the news, but Jay Powell's insistence on "recalibrating" policy helped highlight the central bank's shift to "lower for longer."

Yes, this past week featured the event the market has been anticipating since the Federal Open Market Committee (FOMC) began aggressively fighting inflation back in March of 2022. The committee decided it was time to recalibrate monetary policy, now that they believe inflation is on a path towards their stated goal of two percent. The 50-basis points reduction of the federal funds target rate range was widely anticipated as mortgage rates have fallen nearly 90 basis points since July. The recent drop in mortgage rates was seen as a catalyst to August’s 15.8 percent jump in single-family housing starts and may buoy existing home sales during the fall.

Lower interest rates may help to sustain retail sales, which have seen sales at food and beverage retailers, general merchandisers, and electronics stores slide. Despite slowing in certain sectors of the economy, the Fed views current conditions as very good and did not intend the large rate cut to signal worry that things were rapidly deteriorating. The projections released with their statement forecast positive GDP growth over the near and longer terms despite also forecasting a small uptick in unemployment.

We also learned last week that existing home sales fell in August to a seasonally adjusted annual pace of 3.86 million, declining 2.5 percent compared to July and 4.2 percent compared to a year ago. Inventory remains tight despite the slow sales pace. The median home price rose to $416,700.

Keep in mind that mortgage rates hit fresh new lows on the heels of Wednesday’s Fed rate cut (though the 10-year U.S. Treasury yield actually rose 8 basis points over the course of the week), but home sales have been in a downward trend since hitting their trailing half-decade peak at the end of 2020. This is largely due to the majority of American homeowners being locked into their homes due to the record low mortgage rates they are paying. This will likely keep a significant number of existing homes off the market for years to come.

This week’s highlights include $183 billion in month-end fixed Treasury coupon supply to be auctioned over Tuesday to Thursday and a resumption of Fed speakers. Data of interest include PMIs, Fed surveys, housing-related data, durable goods orders, the final look at Q2 GDP ahead of PCE and Michigan sentiment on Friday. For MBS, Class D 48-hours is today. Today’s data kicked off with the Chicago Fed National Activity Index for August. Later today brings S&P Global manufacturing and services PMIs, and remarks from several Fed speakers. We begin the week with Agency MBS prices nearly unchanged from Friday’s close and the 10-year yielding 3.74 after closing last week at 3.73 percent. The 2-year yield continues to fall and is down to 3.56.

Employment

“TPO Go Accelerates Growth with Sales Team Expansion! Wholesaler Third Party Origination Go (TPO Go) recently expanded key operations and support roles to increase speed and efficiency of underwriting and processing. Following this, the firm is now moving toward expansion of its sales team presence. Trey Van de Bogart, Vice President of Sales, shared, “TPO Go’s operations team has achieved significant process improvements, and we’re now positioned to leverage that expanded efficiency to strengthen our presence in our current territory while also venturing into new markets. We're looking to fill several key Account Executive roles throughout the country with the goal of finishing the year strong and setting the stage for further growth.” TPO Go is a leading wholesale residential lender, offering an exceptional experience for broker and correspondent partners and their borrowers. Candidates interested in joining the team are encouraged to send their resume.”

Massive need for commercial mortgage brokers: Fortress has rolled out a nontraded REIT to fund loans for multifamily, hospitality, and industrial properties, seeking to capitalize on the booming commercial real estate debt market, which is projected to reach $1 trillion by 2025. Goldman Sachs and Principal will target debt investments rather than properties, offering senior and subordinated loans for commercial properties. Due to the mortgage broker shortage Chris Perez, Envestion Commercial Lending, a 25-year commercial mortgage veteran, is offering a broker partnership, turnkey with training, custom web site, tools, and marketing / leads. He is looking for 10 residential mortgage brokers per state to add commercial lending, while continuing to do your normal residential business. Schedule an appointment today to see if you qualify or join the free weekly seminar every Wednesday 1PM EST. Adding commercial to your book of business is a way to expand your current product line while substantially increasing revenue. The is the biggest commercial mortgage boom in over 16 years.