Rob Chrisman's

Daily Mortgage Commentary

  • Oct. 16: LO jobs, title co. opportunity; tech products run the gamut; Agency deals helping liquidity and risk transfer

    October 16, 2018

    What’s not being covered by the mainstream press here at the MBA conference? How about, given the rough financial conditions, monthly (and not quarterly) financials being requested by warehouse & correspondents? How about some attendees bunking up two to a room to save money? Lenders trying to hire LOs, but the top LOs not wanting to move as we enter the 4th quarter and companies not wanting to hire the low-producing LOs? Both originators and management saying that regulator-impacted comp plans have continued to cause confusion, inequality, and hasn’t helped the borrower? And perhaps using net, or residual, income instead of gross income in the DTI calculation ahead of the “QM patch” expiring in January 2021?
     
    Jobs & business opportunities
     
    CoastalStates Bank continues to grow its warehouse offering and is looking to add Relationship Managers in key markets. Applicants will be responsible for business development, credit analysis and managing customer relations. As a depository headquartered in Hilton Head, South Carolina, CoastalStates has developed a warehouse offering with sound lending practices while providing mortgage bankers competitive pricing with excellent customer service. Interested individuals can forward confidential inquires to Tim Haug, VP, Warehouse Lending (843-341-9969).
     
    Assurance Financial offers branch managers and top producing loan originators something they seek: consistency – a way to close more loans on time with the same amount of effort. Our team is designed, built, and marketed to support the LO-every time. We deliver what we promise. Assurance Financial is a growing private residential mortgage banker with offices throughout the South, East Coast, and Midwest US, and we may be just what you’re looking for. Contact Paul M. Peters, CMB (225-939-6353) for a confidential discussion today.”
     
    A national title company is looking for lenders that are interested in partnering to open up a title and settlement company. Lenders must be closing over 50 units a month. Please email me with information on your company for forwarding.
     
    One shouldn’t forget that the Agencies have career opportunities: Fannie Mae and Freddie Mac are hiring, as is HUD.
     
    Lender products and services
     
    “Here’s a hi-tech breakthrough in lending to self-employed borrowers. Amidst rising interest rates and declining origination volume, lenders must cast a wider net for customers, a growing number of which are self-employed. To capitalize on this trend, lenders need a simpler, faster way to underwrite mortgages for Americans who are their own bosses. To this end, Freddie Mac has integrated fintech vendor LoanBeam’s technology with Loan Product Advisor®, our automated underwriting system, to introduce the first and only integrated self-employment income solution for the market. LoanBeam’s software uses optical character recognition technology to extract and digest a borrower’s tax returns and other financials, and then calculate a total income figure that aligns with Freddie Mac’s guidelines. This integration offers lenders several advantages, including an automated review of the accuracy of qualifying income, eliminating the need to chase down unnecessary documents that support residual/excess income and certainty that the income calculation is eligible for representation and warranty relief. Learn more.”
     
    As loan production volume shrinks, production costs explode and competition ramps up, loan officers want to know: How do I get borrowers to commit to me before they shop around with other lenders? Borrowers demand an experience as seamless as their digital coffee ordering app. So how do you satisfy borrower demands, capture leads and reimagine workflows to empower your LOs? With the right technology it is possible. Lenders have started dedicating too much time and money toward streamlining digital platforms to give borrowers app-enabled experiences. This “shiny object syndrome,” which prioritizes flash over the larger loan experience, is a fool’s errand. Stop spending time and money on glittery APIs and reimagine your approach. Dig deeper, rethink your process, digitize beyond the first touchpoint and strive for true innovation. Read the Total Expert guest blog by Kyle Kamrooz, Co-Founder of Cloud Virga: Solving the Cost-to-Produce Problem in Mortgage Lending. 
     
    PerfectLO is the only POS that makes ‘bad’ LOs ‘great’ and ‘great’ LOs more productive. Your back office is likely to waste 25% of their day looking at loans or conditions they never should’ve. PerfectLO’s ownership speaks “mortgage,” not “code,” and has solved for the pain in your office. Its unique application has built in intelligence that digs in and asks all the questions that ‘live’ inside and outside of the 1003. PerfectLO creates a unique doc-checklist based off the borrower’s answers and offers a secure file sharing portal. Customizable milestone updates sent by SMS messages to all parties in the transaction. Your borrowers have a dashboard to view deadlines, timelines, closing location, etc. PerfectLO talks to all LOSs and is multi-language Replace your ‘Apply Now’ button today. Sign up for a free trial and demoClick here to see the most digital mortgage process in the industry.  
     
    At the MBA Convention this week, XINNIX, The Mortgage Academy, shared some monumental news with the industry. It has been the leader in sales and leadership development for years, but now, you can engage with their incredible services in a powerful new way. THE XINNIX SYSTEM is a proven platform that includes training, accountability and coaching to drive results with clearly defined achievement and production milestones for mortgage professionals at every state in their career. Students execute requirements to achieve metrics that advance their business to the next level while earning industry respected designations. To learn more about how XINNIX can you help take business to the next level, contact them HERE!
     
    If there’s a word that creates angst with lenders, onboarding is probably it. However, there is one subservicer who describes their 7-step onboarding process to SIME, Servicing Intelligence Made Easy, as “Onboardacious.” That’s TMS.  Because they believe “onboarding shouldn’t get in the way of taking care of your borrowers,” their process is faster, easier, totally transparent and hassle-free. And who wouldn’t welcome that? As if that wasn’t enough, TMS even conducted a side-by-side comparison so you can see how other subservicers stack up against SIME. If you’ve been thinking about switching subservicers, the results are definitely worth checking out.
     
    Stearns Wholesale Lending continues to support the Mortgage Broker with the introduction of its Preferred Vendor Program. “Through this program, approved Stearns Brokers can access our preferred title and credit vendors at a reduced cost. Reltco, a nationwide title agency, provides our brokers a $200 settlement fee*; Credco is the largest provider of merged credit reports and offers them to Stearns Brokers for $24 tri-merge (individual or joint); Informative research is an innovative technology leader in credit reporting solutions and provides our brokers with $28 credit reports with supplements included. Strength in partnerships has been a defining trait in our success for over 25 years, and it can be in yours, too! Click here to learn more and start saving today! *Certain restrictions apply.”
     
    HomeScout® National MLS pioneered the first-of-its-kind online real estate marketplace where consumers can find a home and get preapproved by a lender in a single platform. Helping loan officers and agents build a robust buyer pipeline and converting up to 2-3 more transactions every month. HomeScout is the only private, mobile search platform to offer consumers 100% MLS listing information from coast to coast and gives lenders more control over transactions by introducing them to buyers prior to meeting an agent. Engage and retain buyers with HomeScout and keep them off public search sites where they will be sold to your competition. Watch as your contacts convert to commissions via the HBM DASH® reporting interface, with real-time updates of your buyer’s activities on HomeScout. Find out more by contacting them HERE  and scheduling a demo or call 952-831-0623.
     
    Capital markets
     
    In the secondary markets the Agencies are doing deals, laying groundwork for a single security, and transferring credit risk away from taxpayers to willing buyers. Originators should know that all these help rates for their borrowers.
     
    On September 21, Freddie Mac priced approximately $725 million in K Certificates (K-1507 Certificates), which are expected to settle on or about September 27, 2018. The K-1507 Certificates are backed by corresponding classes issued by the FREMF 2018-K1507 Mortgage Trust (K-1507 Trust) and guaranteed by Freddie Mac. The K-1507 Trust will also issue certificates consisting of the Class X2-A, X2-B, B, C and R Certificates, which will not be guaranteed by Freddie Mac and will not back any class of K-1507 Certificates.
     
    On the 25th, Freddie priced a K-C Series offering of approximately $912 million in K Certificates (K-C02 Certificates), which are expected to settle on or about September 27, 2018. The K-C02 Certificates are backed by a majority of 7-year, fixed rate loans that feature longer than typical periods of reduced prepayment penalties before maturity.
     
    On September 14, Freddie Mac announced the pricing of the SB53 offering, a multifamily mortgage-backed securitization backed by small balance loans underwritten by Freddie Mac and issued by a third-party trust. The company expects to guarantee approximately $530 million in Multifamily SB Certificates, which are anticipated to settle on or about September 25, 2018. Freddie Mac Small Balance Loans generally range from $1 million to $6 million and are backed by properties with five or more units. This is the ninth SB Certificate transaction in 2018. Freddie Mac is guaranteeing four senior principal and interest classes and one interest only classes of securities issued by the FRESB 2018-SB53 Mortgage Trust. Freddie Mac is also acting as mortgage loan seller and master servicer to the trust. In addition to the five classes of securities guaranteed by Freddie Mac, the trust will issue certificates consisting of Class B and Class R Certificates, which will not be guaranteed by Freddie Mac and will be sold to private investors.
     
    Also on the 14th, Freddie priced a new $1.1 billion offering of multifamily mortgage-backed Structured Pass-Through K-Certificates, which are expected to settle on or about September 26, 2018. K-Deals are part of the company’s business strategy to transfer a portion of the risk of losses away from taxpayers and to private investors who purchase the unguaranteed subordinate bonds. K Certificates typically feature a wide range of investor options with stable cash flows and structured credit enhancement.
     
    On September 6th, Fannie Mae completed its first Credit Insurance Risk Transfer Transaction of 2018 on over $11 Billion of Multifamily Loans, part of their ongoing effort to reduce taxpayer risk by increasing the role of private capital in the multifamily mortgage market. This transaction transferred $166 million of risk to seven reinsurers and insurers, representing the largest amount of credit risk transferred in a multifamily CIRT transaction. The covered loan pool for the transaction consists of 1,106 loans for 1,111 multifamily properties acquired by Fannie Mae from October 2017 through January 2018. Each loan has an unpaid principal balance of $30 million or less. With CIRT 2018-M01, which became effective August 23, 2018, Fannie Mae will retain risk on the first 225 basis points of loss on the $11.1 billion covered pool of loans. Reinsurers will cover the next 150 basis points of loss.  Once the pool has experienced 375 basis points of losses, the credit protection will be exhausted and Fannie Mae will be responsible for any further losses.           
     
    On September 11th, Fannie Mae announced an offering of New Issue 5-year Benchmark Notes due September 12, 2023. The settlement date is September 14, 2018 and the payment dates are each March 12 and September 12 beginning March 12, 2019. The deal will have an issue size of $2 billion, a coupon of 2.875%, and a price of 99.590 yielding 2.964%.
     
    Also on the 11th, Fannie Mae priced a $857.2 Million Multifamily DUS REMIC (FNA 2018-M12) under Its GeMS Program, its 8th in 2018. The M12 provides investors with the opportunity to invest in a 12-year, fixed-rate, call-protected tranche, a response to more borrower demand for longer-term lending as we see a flattening in the yield curve. All classes of FNA 2018-M12 are guaranteed by Fannie Mae with respect to the full and timely payment of interest and principal.
     
    Looking at the rates, the U.S. 10-year closed +2bps to 3.16% despite heightened geopolitical uncertainty (normally decreasing rates) as President Trump stated that Saudi Arabia will face "severe punishment" if it is proven responsible for the disappearance of Washington Post columnist Jamal Khashoggi, who vanished after visiting the Saudi consulate in Turkey. Saudi Arabia has denied any involvement in his disappearance. Saudi rhetoric has threatened any sanctions on Saudi Arabia would hurt the U.S. economy, though America now imports less Saudi oil than in the past due to renewable energies and fracking. As far as strict economic news went, Retail sales for September drastically missed expectations. The silver lining is Core sales, which factor into GDP figures were up 0.5%, which will factor favorably for Q3 real GDP growth. Finally, the Treasury Budget for September showed a surplus of $119.1 billion versus a surplus of $7.9 billion for the same period a year ago. The budget deficit for fiscal 2018 totaled $779.0 billion versus $665.8 billion in fiscal 2017.
     
    Today’s calendar kicks off at 9:15am ET with industrial production, capacity utilization and factory output for September releases, expected to fall, rise, and remain unchanged, respectively versus prior readings. Following at 10am is the August Job Openings and Labor Turnover Survey (JOLTS). We also have one Fed speaker, newly appointed San Francisco President Daly. The 10-year is currently yielding 3.17% and agency MBS prices are worse .125 versus last night’s close.
     
     
    I threw a boomerang at a ghost the other day.
    I knew it would come back to haunt me.
     
     
    Visit www.robchrisman.com for more information on our industry partners, access archived commentaries, or to subscribe to the Daily Mortgage News and Commentary. If you’re interested, visit my periodic blog at the STRATMOR Group web site. The current blog is, “The Rise of the Credit Unions.” If you have both the time and inclination, make a comment on what I have written, or on other comments so that folks can learn what’s going on out there from the other readers.
     
    Rob
     
    (Market data provided in partnership with MBS Live. For free job postings and to view candidate resumes visit LenderNews. Currently there are hundreds of mortgage professionals looking for operations, secondary and management roles. For up-to-date mortgage news visit Mortgage News Daily. For archived commentaries, or to subscribe, go to www.robchrisman.com. Copyright 2018 Chrisman LLC. All rights reserved. Occasional paid job listings do appear. This report or any portion hereof may not be reprinted, sold or redistributed without the written consent of Rob Chrisman.)

     

     

  • Oct. 15: LO jobs; digital products, new book for LOs; big bank mortgage earnings; M&A rolls on

    October 15, 2018

    What’s new here at the MBA’s conference in Washington DC? Plenty of secretive M&A closed-door meetings, continued talk that Ginnie is carefully eying non-bank approved Ginnie issuer’s financial situations, conjecture of MI reps’ jobs in the future if all the MI companies roll out pricing engines, and Fannie & Freddie eliminating some “pricing inefficiencies” to end cherry-picking. The FHFA (overseer of F&F) continue to focus on maintaining access to credit, reduced taxpayer risk, and the infrastructure for a single security. There’s also talk about the BofA/NACA 0% down, 4.5% program. We’re going there again?   Jobs   Do you have what it takes to take your mortgage lending super powers to the next level? Nations Lending is proud to announce its new initiative to grow its footprint across the U.S. where the company is licensed in 47 states, by expanding our retail branch

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  • Oct. 13: Compensation, margin compression, setting passwords & cybersecurity update; corny joke front-runner

    October 13, 2018

    Lots going on out there as lenders continue to work on helping their borrowers, vendors strive for name and brand recognition, and the industry faces higher rates in the future and lower volumes. Not to mention thousands packing their suits and heading to DC. Let’s jump in on margin compression, compensation, appraisal waivers, blockchain, and cybersecurity.   I received this note from Rich Swerbinsky, COO of The Mortgage Collaborative. “Rob, after months of discussing these issues with our members, I penned a couple short pieces on the tough industry climate in general and on how we compensate employees in our industry.   On the subject of appraisals, this comment was received from Jon Weimer. “Interesting commentary on the Fannie Appraisal Waiver, but I have a hard time believing it’s not being utilized because borrowers want to know the property’s value. People

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