Construction, Non-QM Products; MI Program Developments
What does a chief operating officer do, and how much do they make? For builders, the role is vague but is often the #2 person at the company. COO comp, however, for publicly-held builders is well documented. And they make some decent coin.
MI News
For those dealing with private MI (versus FHA & VA insurance), the mortgage insurance buzzword is “granularity.” In general, the companies believe the market would move to a more granular risk-based approach, which allows for better risk-selection and portfolio optimization. Catch the wave! Monoline Mis are Radian, MGIC, Essent, and National MI. Throw in Arch and Genworth and you have the heavy weights.
The group that most of the private mortgage insurance companies belong to (USMI) has continuously called for the FHFA to be much more transparent in pricing mortgage credit risk and believes that the FHFA (who oversees Freddie & Fannie) should eliminate or reduce g-fees and LLPAs, saying these fees impose significant costs on borrowers, and disproportionately harm first-time homebuyers and those without large down payments. The USMI reminds us that low-down payment conventional mortgages already come with private mortgage insurance protection—a risk that the GSEs do not have to bear—and that LLPAs represent arbitrary and redundant fees, and overcharge borrowers across the country.
Radian announced its response to rate changes in the industry: it decreased its monthly premium rates and increased its single premium rates as it attempts to reduce the level of LPMI singles because the policies are not capital efficient under PMIERs. The new rate card includes increased adjusters, which reduce the cost for multi-borrower loans and increase the cost for loans with DTIs above 45%. The rate card is like Genworth’s and has HIGHER base prices (1bps to 3bps in the relevant cells) than MGIC’s new rate card for monthly product.
Starting May 10 Arch Mortgage Guaranty Company (AMGC) began offering a new Community Program. The Community Program is a high-LTV program for borrowers with essential community occupations. The program will be offered to two tiers of borrowers: Community Experts: Certified Public Accountants (CPAs), Chartered Financial Analysts (CFAs), Ph.D.s, Architects, Certified Mortgage Bankers and Designated Actuaries will be eligible for a 100% LTV program. And Community Heroes: Teachers, Firefighters, Police Officers, Emergency Medical Technicians (EMTs) and Paramedics will be offered a 99% LTV program.
“Outsourcing your tough underwriting questions does not have to be time consuming or expensive. Submit your question to Arch MI’s free ASK Center for answers and scenarios in an hour or less that may work for your borrower.”
Genworth announced new borrower-paid mortgage insurance (BPMI) rate cards for both the single and monthly product. The company noted that prices on the new cards are on average about 10% lower than the current card. KBW reminds us that, “The announcement comes just over two weeks after MGIC (MTG) published its new rate cards with prices lower by about 11% on average. We think that such an announcement was expected by the market, so we would not expect much of a reaction from the shares. Historically, all industry participants have quickly matched price cuts, so we would expect the other MIs to make similar announcements over the coming weeks.”
National MI has posted upcoming June MI University classes.
Mountain West Financial is now offering the split MI option allowing borrowers to split the mortgage insurance payment: part monthly and part upfront.
United Wholesale Mortgage has lowered its BPMI rates for the second time in six months, enabling its network of mortgage brokers to potentially save hundreds of dollars each month for borrowers with a 640+ FICO. UWM says that, with its M.I., brokers will save their borrowers three to seven days on every loan by eliminating the second underwrite and avoiding overlays. Price a loan in UWM’s “Easy Qualifier” pricing tool to find your borrower’s lowest payment, as these Elite M.I. rates won’t show up in pricing engines. According to UWM, even if the interest rates are higher, its lower BPMI rates will likely make up the difference.
Capital Markets
Compass Analytics, an industry-leading financial technology provider, announced that CompassPoint™ now offers an integration to Fannie Mae’s Servicing Marketplace API.
Compass Analytics has expanded its integration with Fannie Mae’s Pricing & Execution – Whole Loan® application to now include Servicing Marketplace Rate Sheet API. “…Lenders can efficiently compare pricing from all of their investor partners, as well as loan-level, cash flow-based retained MSR values generated by Compass’s existing MSR modeling capabilities... Clients leveraging Fannie Mae’s Servicing Marketplace API are now able to further streamline their loan sale process by importing updated released servicing bids from their co-issue partners without manual maintenance, inclusive of effective dates and historical pricing.”
Turning to the bond markets, we saw rates move higher yesterday following the release of solid April Retail Sales data that included an upward revision to the March reading. Overall spending helps drive the economy, and consumer spending on goods was decent in April, with core retail sales, which exclude auto, gas station, building materials, and food and drinking services sales, jumping 0.4%. Fannie’s trading desk reported that, “Yesterday’s price action brought out heavy mortgage trading volume as originators flushed out their pipelines and delta hedged into the sell-off. The street reported $3.1 billion in origination compared to a 5-day average of $2 billion.”
And on the speaking circuit, Dallas Fed President Robert Kaplan said he would like to see the Fed's balance sheet decline to under $3 trillion. SF Fed President John Williams said he is comfortable with the current pace of rate hikes.
This morning we’ve had weekly mortgage applications from the MBA for last week (down almost 3% with refis back to 2008 levels), and April housing starts and building permits (1.287 million, -1.7%, permits fell to 1.352 million). We’ll also have April industrial production and capacity utilization, along with two scheduled Fed speakers: Atlanta Fed President Bostic and St. Louis' Bullard. Hump Day starts with rates a tad lower versus Tuesday’s close: the 10-year is yielding 3.06% and agency MBS prices are better a shade.
LO and Lender Products
With 2018 shaping up for lower volumes, compressed margins and a purchase driven marketplace, lenders across the U.S. are struggling to find ways to produce revenue and are searching for innovative products to support their origination platforms. CFSI Loan Management is a full-service construction risk mitigation company, helping lenders manage the construction process from beginning to end. “We help our lending partners to ensure that the contractor and project feasibility phase is set prior to loan approval and after loan funding we provide full service fund control (including lien releases) and a national inspection platform that allows our clients to ensure that the project is progressing on time and the percent complete is accurate for funding each draw. Lenders manage credit risk, CFSI manages construction risk. Let CFSI Loan Management help you lead your market with real estate agents, borrowers and builders with a construction loan program.” Please contact President Brian Mingham for information.
The mortgage industry’s latest and greatest 1003 has finally arrived! Floify’s groundbreaking, “interview-style” 1003 not only delivers a beautiful, simple, and secure mortgage application experience for borrowers, but it also offers tons of useful automations and integrations that reduce cycle times making an LOs job a lot easier. Major industry players, including SharperLending, Credit Technologies, Alliance2020, and Sarma have joined the ranks of Floify’s app store, and when combined with Floify’s 1003, allows for instant and seamless borrower credit pulls. Powerful business logic gets your borrowers up and running faster by automatically generating specific needs-lists and granting access to their personal point-of-sale to upload their documents. If you are considering upgrading your mortgage workflow to include an end-to-end point-of-sale system, now is the perfect time to take advantage of Floify’s incredible solution and brand new 1003. Be on the leading edge of mortgage tech – request a live, 30-minute demo to learn more!
“As challenges persist in the primary conventional and government origination marketplace, Deephaven Mortgage offers an opportunity to expand your product offerings and expand your ability to help solve consumer demand. Our bank statement programs, flexible credit guidelines, and in-house service model can help you drive new revenue streams while mitigating risk and limiting costs. Our executive team will be attending the MBA Secondary Market Conference and would enjoy the opportunity to talk about how we can help get you further into the Non-Agency market with Deephaven as your long-term, committed partner. We are across the street from the Conference at the Paramount Hotel. Email us at sales@deephavenmortgage.com to schedule an appointment at the conference or to engage in conversation now.”
“ARMCO has integrated with BankVOD, enabling the seamless transfer of bank data. ACES Risk Management (ARMCO), the leading provider of enterprise financial risk mitigation software solutions, announced an integration with BankVOD, the company that pioneered the electronic risk interface for asset verifications. This integration, which provides a direct, seamless connection between ARMCO’s ACES Audit Technology and BankVOD’s Verification Hub™, enables ARMCO clients the ability to order Asset Verifications, 4506-T, Employment and Occupancy and Liens & Judgments on a batch or flow basis, and receive the data via a secure electronic transfer directly into their ACES instance. “This integration doesn’t merely make the verification process faster, it also makes it more consistent and secure, which are two big factors in achieving quality,” said Phil McCall, president of ARMCO.
Employment
Lenda, a first-of-its-kind platform that allows homeowners to complete their home loan online from start to finish, is searching for a Head of Sales. “At Lenda we close loans three times as fast as the industry average and as the Head of Sales you will be directly responsible for driving the team that is responsible for the revenue growth of the business. This role is responsible for coaching and leading a team of Home Loan Advisors and Customer Success Managers to a minimum of 50% y-o-y growth in origination volume, revenue, and funded units. The ideal candidate will be assertive, communicative, a natural leader, and results-oriented. To be successful in this role, it’s critical that you understand the customer funnel and be able to analyze and strategize how to improve sales results MoM, YoY. You’re a team player and know how to collaborate effectively across marketing, business development, product and engineering. If you’re interested, please apply here. Questions can be addressed to VP Alice Liang.
Arch MI is searching for an Account Manager in Northern CA who builds and maintains long-term relationships in customer organizations to ensure that growth and quality targets are met or exceeded. The AM develops advocacy with key branch level decision makers and grows profitable market share by proactively identifying and capitalizing on new business opportunities. S/he provides support to National Accounts consistent with organizational objectives and ensures customers receive superior quality and responsive service. Will be responsible for Arch’s visibility in the marketplace, calls patterns, and results of lender client relationships. Achieves or exceeds stated account growth and NIW goals. Uses Solution Selling to sell a variety of complex products and services that will improve customers’ business. Understands competitors’ strengths and weaknesses and how Arch US MI stands in comparison. Effectively articulates to customer the differentiated impact of Arch US MI’s offering on the customers’ business and processes. Interested parties should contact Tonya Battle, HR.
“Assurance Financial is quietly growing into a nationwide leader in lending. Just ask Mike Killmeyer who recently opened a branch for Assurance Financial in Denver, Colorado. Mike was equipped to take loan applications immediately with little downtime and is now poised to add to his growing professional staff. Mike and his team saw that our compensation structure is excellent, and our back-office support was second to none - 16 years of working, changing, and perfecting it. He also saw that we have an unwavering mission to close loans on time, every time! We have immediate openings for proven, successful, producing Branch Managers and MLOs in Wilmington, Charlotte, Denver, Austin, and many other branch locations throughout the country.” For immediate consideration, contact Paul Peters, CMB, Assurance Financial, Recruiting Manager (225-239-7948).
In capital markets news, Vice Capital Markets has added another industry veteran to their team. Congratulations to Scott Colclough, new SVP of Business Development. Scott brings over 23 years’ experience in capital markets to Vice and is joining a team whose senior management also averages over 20 years in capital markets and traders that average almost 10 years’. Vice is a hedge advisory firm that works with lenders of all sizes throughout the country.
And the Trump administration is formally nominating Michael Bright to serve as president of Ginnie Mae. (Bright has been leading Ginnie Mae on an interim basis since July 2017.) Ginnie Mae has been without a permanent leader since January 2017; Bright would take over officially for former Ginnie Mae President Ted Tozer who stepped down at the beginning of the Trump administration.