Electronic Bidding, MORA, Processing, Marketing Tools; CFPB and Servicing Fees, Mortgage Fraud Case

I travel a little bit, so it was with great interest that I read, “The Department of Transportation… will soon require airlines to quickly refund passengers if they cancel, delay, or make significant changes to flights.” “A book hit my head, and I have only my shelf to blame.” Odd things happen all the time. Someone puts their cup on the ground, leans over to pick it up, and hits their head on the counter and gets a concussion. If I was rich, I’d have someone pick it up for me. What does $65 million get you near Miami? Rob Branthover points out that the three lots are owned by Patrick Markert, of AmeriSave fame. Who’s gonna buy it? Men and women cite different challenges when purchasing a home. 55 percent of females said their biggest challenge when buying a home as a single individual was finding a home in their price range, but 51 percent of males said that their biggest challenge was saving up for a downpayment. There are some similarities. Over half of respondents believe the idea of waiting for a significant other to buy a home is outdated. And two-thirds of single homebuyers did not have financial assistance from family or friends with a downpayment for their home. (Found here, this week’s podcasts are sponsored by Calque. With The Trade-In Mortgage powered by Calque, homeowners can buy before they sell, make non-contingent offers, and tap their home equity to fund the down payment on their next home. Today’s has excerpt from yesterday’s Mortgage Matters show with Sterling Point Advisors Jeff Juliane and Brett Ludden on the M&A space and how to value mortgage companies.)

Lender and Broker Products, Software, and Services

“The 2024 Mortgage Bankers conference season kicks off with two great conferences in May with the National Secondary Conference in New York as well as the Texas MBA Conference in Austin TX. The Newrez team will be at both of these conferences and looks forward to meeting with you to discuss our most recent product improvements, such as adding TX 50 A6 loans on Fannie Mae MH Advantage® / Freddie Mac CHOICEHome® and HUD 184 program coming soon. Also, to drive more to your bottom line, Newrez has increased our maximum pricing for our Non-QM Products (SmartEdge, SmartSelf and SmartEdge) to 103.00. We continue to utilize social media to share important company news and information, so we invite you to follow us on our Correspondent page on LinkedIn. We’ve had a great start to 2024, and it’s due to our valued customers who have placed their trust in Newrez!”

“Join Planet Loan Servicing at the IMN SFR Forum East May 20-22. Explore our expert blend of technology, service, and cost-efficiency, enhancing Single-Family Rental investments. Managing $105B+ in total assets, Planet provides top-tier expertise and savings-focused strategies. Enjoy complimentary access to our proprietary tools and discover how we create lasting value. Let’s connect and unlock the full potential of your investments. To schedule your meeting now email LetsConnect@PlanetLoanServicing.com.”

Whatever your business initiatives are, know this: Flagstar is fully committed to the mortgage space, just as it has been for over 35 years. Flagstar continues to be well positioned in the marketplace and offer a comprehensive product set, including construction loans with limits up to $3 million and flexible terms, a competitively priced suite of non-QM products, including bank statements options, doctor loan, HELOCs… and many more in multiple mortgage channels. Looking to grow, or diversify your business? Flagstar’s expertise also includes award-winning warehouse lending, MSRs, servicer advances, and EBO financing solutions, all of which can be tailored to meet your business needs. The specialized mortgage banking team can even help streamline your operations and maximize the value of your cash balances. Flagstar is truly a one-stop-shop for lenders, large and small. Visit Flagstar.com/why to learn more.

Guaranteed Rate selects Evocalize to power sophisticated, local digital marketing for loan officers to generate new customers and attract referral partners across Google, Facebook, Instagram, TikTok, Gmail, and YouTube. Evocalize, renowned for its industry-leading technology utilized by major real estate and mortgage tech platforms like CMG Financial and Realtor.com and more, brings its expertise to enhance Guaranteed Rate’s marketing efforts. This collaboration promises to deliver significant benefits, including enhanced lead generation, reduced marketing costs, and improved customer engagement, ultimately driving business for Guaranteed Rate and its loan officers. Learn more here.

Imagine Amazon saying, “Our mobile buying experience isn’t very good… so buy this from a desktop or call us and we’ll do this over the phone.” Never in a million years. But mortgage lenders do that every day because they have janky online loan applications that they know borrowers will hate. If that sounds familiar, time to check out LiteSpeed by LenderLogix. With its seamless integration into Encompass® by ICE Mortgage Technology, you can reinvent your borrower experience in just a couple of weeks.

There’s no such thing as a “one-size-fits-all” technology solution. Every financial institution is different. And modern banks, credit unions, lenders, and insurance brokers need options that make sense for their businesses, their goals, and their customers or members. The Total Expert Partner Ecosystem is a curated collection of industry-leading partners, thought leaders, and technology providers designed to help you address market challenges, drive growth, and create customers and members for life. Leverage 70+ integrations, strategic relationships with Salesforce and AWS, and a rich library of shared industry knowledge and best practices to develop the strategies that support your business goals and build the tech stack you need to put it in motion. Learn more!

“Proactive risk management and steadfast compliance are essential to your business’s foundation. Moreover, Fannie Mae approved lenders and applicants are required to demonstrate their commitment to managing risk effectively. To ensure lenders are meeting these requirements, Fannie Mae performs Mortgage Origination Risk Assessments (MORA). In this short video, Richey May’s internal audit experts dive into what Fannie Mae looks for regarding internal audit requirements during their approval process and when performing a MORA, and common findings. Why is this important? Having an established internal audit function separate from operations is essential when going through a MORA or applying for approval. Tune into the video to learn more about what they’re looking for or speak with one of our internal audit experts today. Email info@richeymay.com.”

Compliance, Regulations, and Another Fraud Case

The CFPB addressed “junk fees” in the production of loans. The industry immediately groused about the term “junk,” and for good reason.

But now we have the CFPB publishing an edition of Supervisory Highlights describing the agency’s actions to combat “junk fees” charged by mortgage servicers, as well as other illegal practices. CFPB examinations found servicers charging illegal junk fees, such as prohibited property inspection fees; sending deceptive notices to homeowners; and violating loss mitigation rules that help struggling borrowers stay in their homes. In response to the CFPB’s findings, financial institutions refunded junk fees to borrowers and stopped their illegal practices.

Considering taking your servicing in-house? Even if bringing it in-house makes sense on the surface, there are also increased internal and external audit expenses, complaint management, regulatory compliance and examination, agency reporting, software, payment processing, call center monitoring, escrow management, and more. You need a certain scale before it becomes profitable to bring it in-house vs. outsourcing. Reason being, if you’re going to bring it in-house there’s a certain minimum fixed overhead just to set up the operation, technology, risk, and compliance infrastructure, etc. Companies looking to bring it in-house should understand where this breakeven point is. If IMBs, in particular, are sellers of MSRs (mortgage servicing rights, the “piggy bank” of net worth for independent mortgage banks) because they need liquidity in this tough origination environment, are they going to be able to flex down their servicing cost infrastructure as they sell MSRs and reduce servicing loan count?

In other news, the US Attorney’s Office reported that “Two Former Employees of New Jersey Mortgage Lending Business Charged for Roles in Mortgage Fraud Scheme.” “Christopher J. Gallo, 44, of Old Tappan, New Jersey, and who now works for CrossCountry, and Mehmet A. Elmas, 32, a U.S. citizen who resides in Turkey, are charged by complaint with one count of conspiracy to commit bank fraud.”

Capital Markets

Agile, a groundbreaking fintech bringing mortgage lenders and broker-dealers onto a single electronic platform, announced today the launch of electronic bidding for the fourth month in the To-Be-Announced mortgage-backed securities (TBA) market. This marks a significant leap forward in the trading landscape of off-screen securities. By offering the option to extend trade settlements an additional month, Agile’s electronic platform minimizes the need for frequent rolls, thereby streamlining the process of maintaining an aggregate hedge position. Additionally, Agile will be hosting an industry webinar on May 2 at 11AM PT in which a group of expert panelists will discuss Managing Margin Calls Before & After FINRA 4210. Register for the webinar for an overview of the amendments imposing margin requirements on “Covered Agency Transactions”. With the implementation date coming up quickly, this webinar aims to help mortgage lenders prepare for how it will affect their secondary marketing processes.

Mortgage rates have risen to the highest level in five months, impacting borrowing costs for potential homebuyers. There isn’t much else out there to report, but we did learn yesterday that the Durable Orders report for March surpassed expectations, with the actual figure at 2.6 percent compared to the consensus of 1.8 percent.

Despite the positive durable goods outcome, the report showed signs of ongoing hesitancy in demand, particularly in shipments data, which remained weak. The volatility in aircraft-related orders contributed to the overall increase but also highlighted underlying uncertainties.

The first look at Q1 Gross Domestic Product kicked off today’s calendar. +1.6 percent annualized, low, and truly showing a decceleration. Real GDP growth was expected to slow in the first quarter to +2.5 percent, even with support from consumer and government spending. Jobless claims were +207k. Later today’ the U.S. Treasury will cap this week’s note auction slate with a $44 billion 7-year note sale, pending home sales for March will be released, as will KC Fed manufacturing for April, and Freddie Mac’s Primary Mortgage Market Survey. We begin the day with Agency MBS prices slightly worse than Wednesday evening, the 10-year yielding 4.69 after closing yesterday at 4.65 percent, and the 2-year is yielding 4.97.

Employment

Mortgage executive available! Is your company in need of a bold and creative leader to guide its pivot, someone who can do more than recruit talent and hope for favorable market conditions? Do you need a driver who is part visionary, part complex problem solver, and part accountability monster with the discipline to execute? Looking for the catalyst person to drive your FinTech? Is having a leader who can quickly disseminate the complicated into executables aligned with OKR’s of high value? Is proactivity and a sense of urgency important? Would change without burning bridges be of value to you? Do you need a team person who believes in autonomy while pulling out the best of people’s skills for incredible operational performance, retention, and role satisfaction? If you are looking for this type of executive leader, (not manager), confidentially contact Chrisman LLC’s Anjelica Nixt to forward your note to this dynamic, galvanizing, goal attaining leader.

To take the platform to the next level, UMortgage is adding leadership that’s not afraid to get its hands dirty. Last week, UMortgage proudly announced that long-time Branch Manager, Jimmy Hobson, had been promoted to National Sales Leader. Having averaged +128% year-over-year growth since 2021, UMortgage has cemented itself as one of the fastest-growing mortgage companies in the country. Jimmy, a multiple-time Scotsman Guide ranked LO, will help the platform continue that growth by establishing set standards for UMortgage Loan Originators, Branch Managers, and Operations team members that will foster greater consistency in the homebuyer experience. “I’m humbled at the opportunity to continue to drive UMortgage forward,” said Jimmy. “We have a lot of talent here and with better alignment and coaching, we can climb straight to the top.” Follow this link to learn more about Jimmy’s role and how his leadership will benefit UMortgage’s LOs and the clients they serve.