1.24.23 Future Rate Hikes; Curinos' John Sayre on 2023 Mortgage Industry Trents; Central Bank Portfolio Securities

Thanks to Richey May, a recognized leader in providing specialized advisory, audit, tax, technology, and other services in the mortgage industry and in banking.

Transcript

Conference attendance in 2023 may be down, given layoffs and budget cuts, but here’s a handy dandy list of events this year and state organizations. (Click on “Conferences” on the right; for any additions or corrections, contact Ed.) Here at the MBA’s IMB conference, it’s not much fun talking about revenue and margins. So, let’s talk Vitamin C! San Diego County, and California, ranks first with 59 percent of the U.S. citrus production. And when life gives you lemons, you make lemonade. What about when life gives you plenty of barren areas of snow? Thank you to Len T. for this one, reminding us that some people have inordinate amounts of time on their hands. And thank you to Michael Chan yesterday who sent the real estate version of Wordle if you will, where you guess the price of the house. (Watch for those oceanside house prices!) Yes, there are plenty of people out there looking at housing, and the amount for sale. On Friday NAR reported that total housing inventory levels broke under 1 million in December, dropping to 970,00 units. (This week’s podcast is sponsored by Richey May, a recognized leader in providing specialized advisory, audit, tax, technology, and other services in the mortgage industry and in banking. Listen to an interview with Curinos’ John Sayre on the latest statistical trends in the mortgage industry and what to look forward to in 2023.)

Lender and broker software, products, & services

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ICE Mortgage Technology announces Affordable Lending Analytics Solution. Matching potential homebuyers with affordable lending programs is a challenge. This is often because many loan officers lack the knowledge or tools to easily identify eligible borrowers. ICE Mortgage Technology® recently announced a new Affordable Lending Analytics solution that is designed to help lenders effortlessly identify affordable lending opportunities within their pipeline, match borrowers to funds, and turn more people into homeowners. Matching potential homebuyers with affordable lending programs is a challenge, often because many loan officers lack the knowledge or tools to easily identify eligible borrowers. ICE Mortgage Technology® recently announced a new Affordable Lending Analytics solution that is designed to help lenders effortlessly identify affordable lending opportunities within their pipeline, match borrowers to funds, and turn more people into homeowners. Click here to learn more and receive the latest updates on ICE Mortgage Technology Affordable Lending Analytics.

“Are your correspondent investors in it for the long run? At Plaza, our National Correspondent Division has been a dependable source of liquidity through various market cycles. We bid aggressively and can purchase in as quickly as just a few days. Our product menu is one of the broadest in the industry: everything from renovation programs to reverse to non-QM, as well as government and conforming. The average tenure of our AEs is 10 years, so they know their business and can contribute to yours. Plaza Home Mortgage®. You’ll like our bids, but you’ll love the way we do business. Contact Plaza.”

Interested in a good read or listen? The StorySeller Adventures officially comes out today, and the first Amazon review says it all, “The book offers relatable advice and detailed guidance while taking the reader on a set of enjoyable adventures through a series of complex corporate scenarios. Helping the reader define their Unique, Authentic Winning Story (UAWS) is a powerful tool for readers, empowering their strategic relationships, and overcoming resistance in not only the sale process, but across all aspects of their business and career.” The entertaining allegory and step-by-step guide to StorySelling is written by Gibran Nicholas, CEO of Momentifi. “I tell real life stories and lessons in allegory format from my 20+ years of experience in business,” says Gibran. “I then break down the 9 human archetypes explored in the book, providing step-by-step coaching tips for how to overcome the objections and win the support of each archetype.” Click here to get the book.

“As a pioneer of Non-QM with over 27 years of experience, NQM is our DNA™, and it shows. IMPAC allows borrowers to tell their stories while our seasoned in-house underwriting and operations teams maintain 24-hour underwriting turn times. We understand that communication is critical when navigating brokers through the waters of Non-QM and help close loans faster by offering the ability to speak directly with our underwriters. Our Non-QM product suite includes Bank Statement, DSCR, Full Doc, Asset Qualification, and 1099, and our 21 and Done™ program (details here) can save borrowers up to $500 on each loan. Visit our Tools and Resources page to learn about what we offer, or contact an Impac AE with questions! NMLS #128231.”

How can you help your referral partners with borrower stickiness? By providing them with hyper-specific content they can share with clients. The more customized a homebuyer’s journey feels, the better chance you both have at converting them to an application and, ultimately, a secured loan. QuickQual by LenderLogix is catching the attention of Real Estate professionals across the industry as the preferred way to create, manage and share pre-qual and pre-approval letters. Out with the static PDFs, in with on-demand, high-touch mortgage calculators specific to each client. Empower your partners to run payment and closing cost scenarios, compare multiple loan products and generate updated letters within the guardrails you set. Teams that use this solution see an average increase in their pre-qual to application conversion rate of 30 percent. It’s worth checking out.

Is home insurance getting in the way for your loan teams? Matic integrates the homeowners insurance process directly into your existing systems, providing an improved experience for borrowers (and faster closings) while adding a low-lift revenue stream for lenders and servicers. Learn how Matic delivers automated, personalized insurance offers to borrowers from 40+ names you know, like Progressive, Travelers, Nationwide and more. Book a demo to learn more about partnerships!

Here's how to work less and win more in 2023. Your first instinct may be to work even harder than you did last year. But 2023 promises to be another challenging year and harder just won't get it. Smarter will. Smarter means working hard at the things that only you can do, and delegate everything else. Focus your energy on the essential tasks: making one-to-one phone calls, having face-to-face meetings, and personalizing your marketing with video content. Automate tasks like prospect follow-up, loan in-process updates, Realtor and past customer outreach, thank you cards and closing gifts. Set up automated social media posts also. A truly fantastic SmartCRM system will do all this and more. Look at Usherpa's Relationship Engagement Platform, ranked number one in customer service and client loyalty in the mortgage business. Download this free Field Guide to Success and see how easy delegation can be.

Are Your Mortgage Quality Control Functions Independent? Quality Control independence is critical to creating a strong and compliant Mortgage Quality Control process. Partnering with TENA for your Mortgage Quality Control ensures your QC functions are independent of your mortgage production functions, keeping your firm compliant with the Fannie Mae Selling Guide and other regulations. The December 2022 issue of Fannie Mae’s Quality Insider emphasizes the importance of keeping your Quality Control department and Mortgage Production department independent of each other. Doing so can avoid conflicts of interest and preserve the integrity of your firm’s QC program. With TENA’s long track record of providing comprehensive Mortgage Quality Control services, you can be confident your firm is staying compliant and reducing risk when choosing TENA as your QC provider. Contact us today for more information or visit our website.

LOs and customer service

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If the painful mortgage market of 2022 and the pot-holed road ahead in 2023 has you feeling like a character in the AMC series The Walking Dead, you might appreciate STRATMOR Group Customer Experience Director Mike Seminari’s latest Customer Experience Tip, which asks, “How Can Lenders Thrive in a Post-Meltdown Mortgage World?” After a year of mass layoffs and a 70 percent drop in loan volume, many in the mortgage Industry are like the characters in the television series, just happy to have survived. But 2022 was only the end of a season, not the end of the story, and many in the industry are asking “What next?” Seminari offers suggestions for building a customer experience strategy that takes a page from the series script: find the damage, repair the issues and monitor progress toward a better future. Seminari also suggests three steps lenders can take today to thrive in 2023. Check out “How Can Lenders Thrive in a Post-Meltdown Mortgage World?” available on the STRATMOR website.

Nature bats last

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FEMA is the official source of disaster declarations. And when FEMA publishes them, lender and investor policies and procedures are triggered. And with the United States stretching from Maine through California, out to Hawai’i, and up to Alaska, we can be guaranteed something is going on somewhere, sometime. Recently, Alabama, Georgia, and California.

California, which accounts for 20-25 percent of home loans, has seen severe winter storms, flooding, landslides, and mudslides, with an incident period date of 12/27/2023 and continuing. FEMA declaration DR-4683-CA include Merced, Santa Cruz, and Sacramento counties. Individual Assistance granted to 3 counties in Amendment No. 1 to DR-4683; Monterey, San Luis Obispo, and Santa Barbara. Addition of San Joaquin County in Amendment No. 2 to DR-4683.

Alabama: Severe Storms, Straight-line Winds, and Tornadoes, incident period date 01/12/2023-continuing. Autauga and Dallas counties in DR-4684-AL. Counties of Coosa, Elmore, and Hale added in Amendment No.1 to DR-4684.

Georgia: Severe Weather incident period date beginning 01/12/2023 and continuing, DR-4685-GA include counties of Butts, Henry, Jasper, Meriwether, Newton, Spalding, and Troup.

For loans submitted with an appraisal dated on or before FEMA declared incident period end date or for those submitted without an appraisal, Sun West will require an interior and exterior inspection prior-to-funding or purchase of any loans with subject properties that are determined to be at risk. The inspection must verify that the property is sound, habitable and in the same condition as when it was appraised. Partners can access the Sun West Seller Guide under the HELP section in sunsoft.

On 1/19/2023, FEMA declared federal disaster aid with individual assistance has been made available to 3 additional Alabama counties: Coosa, Elmore, and Hale with Amendment No.1 to DR-4684. View tables in AmeriHome Disaster Announcement 20230109-CL.

Capital markets: the Fed and mortgages

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*Cue the pomp and circumstance* Congratulations to the unprecedented number of grads who recently attended Optimal Blue’s Hedging 101 webinar. Now, it’s time to take your knowledge of mandatory delivery even further. Join Optimal Blue tomorrow for Hedging 201 – the next session in our series as we take a deeper dive into the different components that make up your pipeline valuation. From data integrity to gain/loss reconciliation, we will cover features and functionality that Optimal Blue’s hedging and loan trading services provide. This includes mitigating interest rate risk, saving hedging cost, and making every penny possible on your loan sales. Save your seat for the Hedging 201 webinar, which will be held tomorrow, Jan. 25, at 1 p.m. ET.

But how about that Federal Reserve? There are only two weeks to go until the Fed’s February 1 rate decision and the market is currently estimating a 25-bps hike then, followed by another 25 bps in March. Although inflation has moderated slightly the past few months, it is still well above the Fed’s 2 percent target, so recent Fed speakers have been trying to prepare the market for rates to be “higher for longer”. Of course, they could also just move the goal posts by raising their inflation target.

To open the week, U.S. Treasuries, and along with them securities backed by residential mortgages, pulled back price-wise, recording the third consecutive day of losses as markets continue to price in future expected rate hikes and the corresponding economic fallout. Though we won't get any “Fed-speak” for the remainder of the week, as we are in the quiet period ahead of the FOMC meeting next week, outgoing KC Fed President George said yesterday that it is time for the Fed to think about its plan to exit the MBS market and be more explicit in its language on how bond purchases may figure into future monetary policy. She noted that Fed officials agree in principle that the central bank's securities portfolio should only include assets issued by the Treasury.

Today’s economic calendar is already underway with Philadelphia Fed non-manufacturing for January. Later this morning brings Redbook same-store sales, S&P Global manufacturing and services PMIs, Richmond Fed manufacturing, and a Treasury auction of $42 billion 2-year notes. Today is also Class D 48-hours, which is when whoever is delivering securities tell the entity who has bought them what to expect. We begin the day with Agency MBS prices slightly better than Monday night and the 10-year yielding 3.49 after closing yesterday at 3.53 percent and the 2-year at 4.22.

Actual medical exams & physician experiences. (Part 2 of 5.)

2. At the beginning of my shift I placed a stethoscope on an elderly and slightly deaf female patient's anterior chest wall.

“Big breaths,” I instructed.

“Yes, they used to be,” replied the patient.

(Submitted by Dr. Richard Byrnes, Seattle, WA)

3. While acquainting myself with a new elderly patient, I asked, “How long have you been bedridden?”

After a look of complete confusion she answered, “Why, not for about twenty years… When my husband was alive.”

(Submitted by Dr. Steven Swanson, Corvallis, OR)