LOS, Processing, Non-QM, IT Tools; Private Equity, Manufactured Homes, and Freddie/Fannie

“In Florida earlier this week we celebrated with a couple of adult beverages: Metamucil and Ensure.” Every state has its quirks, and every state is made fun of by those in other states. Human nature, right? Here in Chicago, the restaurant scene is on fire, but White Sox fans aren’t happy about the team having the worst record in the majors. While the nation’s fastest-growing cities continue to be in Sun Belt states, new population estimates show that some of the top gainers are now on the outskirts of metropolitan areas or in rural areas. For example, to the west of Chicago, Rockford has become one of the top real estate markets in the nation! And with a hot real estate market usually comes increased lending. What originator can’t learn from hearing another top producer, especially when they love what they do? Today The Mortgage Collaborative’s Rundown (noon PT) will feature Austin Lampson who was just highlighted as one of the top 5 female loan originators in the country in 2023 and have been in the top 1 percent of loan originators since 2014! (Today’s podcast is found here, and this week’s are sponsored by Richey May, a recognized leader in providing specialized advisory, audit, tax, cybersecurity, technology, and other services to the mortgage industry. Hear an interview with Loan Atlas’ Craig Strent on building your origination business based on non-Realtor referral sources.)

Software, Products, and Services for Lenders and Brokers

Transform your mortgage operations with Dragon9 Partners, a leading IT solutions firm with years of hands-on experience in mortgage origination, sales, and servicing. Whether you are a small, medium, or large Lender/Broker, our expert team understands the intricacies of the mortgage industry and is dedicated to delivering innovative technology solutions tailored to your needs. Whether you are looking to streamline your origination process, boost sales efficiency, or enhance servicing operations, we offer comprehensive IT consulting services to drive your success. Partner with us to leverage cutting-edge technology, improve customer satisfaction, and achieve operational excellence. Let Dragon9 be your trusted technology partner in navigating the complexities of the mortgage landscape. Contact us today to learn how we can help you achieve your goals. The first 3 responses will receive a free cybersecurity readiness assessment.

Does your client’s debt-to-income ratio (DTI) hinder their financing options? Castor Financial’s Non-QM loan programs can help. Castor’s unique blended income approach considers various assets, including retirement funds, stocks, and even checking accounts, as qualifying income streams and can be combined with W2 or Bank Statement income streams. And there’s no minimum asset value required. Self-employed borrowers can leverage both personal and business bank statements. Additionally, non-occupying co-borrowers can be added to strengthen applications. Let Castor Financial empower you to unlock financing opportunities for your clients. Visit us for more information.

Registration for the 2024 Loan Vision Innovation Conference (previously the Loan Vision User Conference) is now open! With a focus on innovation, growth, and doing more with less, our new and improved annual conference is taking place in Chicago, Illinois from Monday, September 23rd – Wednesday, September 25th. This conference will deliver highly recognized names in mortgage banking as our speakers, enhanced social networking events, and a fresh agenda for both executives and users and will be aimed at redefining industry standards and setting a new benchmark for excellence. If you’re interested in sponsoring this event, please contact Haleigh Heilman. To learn more about this conference, register, and book your hotel, please visit here.

“Mortgage Brokers! Looking ahead, we are thrilled to present a myriad of exciting growth opportunities. Kind extends an invitation for you to participate in our monthly broker connect, where you will have the invaluable opportunity to gain insights from esteemed industry experts and leaders. This will encompass a comprehensive discussion of the latest market trends and developments within Kind and the mortgage industry at large. Mark your calendars for Wednesday, June 26th, at noon PST (3 PM EST), during which, you will have the privilege of hearing from our very own Kind Ambassadors, including Glenn Stearns – CEO & Founder of Kind Lending, Delfino Aguilar – Chief Production Officer of TPO, & Krish Dhokia – Chief Marketing Officer. The perspectives and knowledge they bring to the table are bound to be invaluable to you and your business. Take a moment to register here.”

Want to soak up some sun instead of being stuck in the office this summer? Make sure your pipeline keeps churning with wemlo® processing support. Processors at wemlo, who support a variety of loan products and lenders, hustle behind the scenes so your business never skips a beat. Plus, lining up wemlo processing support is a breeze. Simply book a 1:1 call, set up your profile, go over the processing agreement, meet your pod (1 manager and 2 processors), and start submitting loans. Ready to trade office hours for beach hours? Enjoy peace of mind knowing your business is in good hands: book your wemlo demo today!

What’s the real cost of your mortgage LOS? Your institution strives to provide a smooth, intuitive application journey that keeps borrowers engaged from start to finish, lowering abandonment rates and promoting portfolio growth. But behind the scenes, issues such as maintenance burdens, resource-intensive tasks, and escalating operational costs may be hindering your ability to effectively support borrowers. Not to mention legacy technology rife with latency issues and excessive vendor integrations, which cause further friction and stress. A holistic examination of your current system is essential to fully understand your total cost of ownership and increase efficiency, improve the borrower experience, and boost ROI. Take the MeridianLink® Mortgage LOS Impact Assessment to see how your mortgage LOS stacks up.

Private Equity Companies and What They Own

Manufactured housing makes up a noticeable portion of the stock in several states. (Yes, I realize that there are varying degrees of manufactured housing, some being very “high end” and some not.) Like doctor and veterinary practices, private equity funds are buying up communities. The Private Equity Stakeholder Project (PESP) and Manufactured Housing Action (MHAction) released the Private Equity Manufactured Housing Tracker, a first-of-its-kind tool monitoring private equity and hedge fund ownership of manufactured housing communities in the U.S.

“Manufactured housing is a vital source of affordable housing for the over 21 million Americans who live in them, many of whom are on fixed incomes. Since the early 2000s, institutional investors such as private equity firms have increased their presence in the manufactured housing market. In 2020 and 2021, they accounted for 23 percent of all manufactured home purchases, up from 13 percent between 2017 and 2019… Residents at corporate-owned communities have reported rent increases of as much as 60 percent after private equity-owned landlords took over their parks. Michigan has the second highest number of private equity-owned manufactured housing parks in the U.S., with 109 parks (33,115 lots). Other states in the top three are Florida and Texas.

Three of the four largest private equity firms in the U.S. own manufactured housing portfolios: Apollo Global Management (Inspire Communities), Blackstone (Treehouse Communities), and The Carlyle Group… Almost half (49 percent) of the private equity-owned parks identified for this tracker were financed by Fannie Mae or Freddie Mac. In contrast, Fannie Mae or Freddie Mac financed just 9 percent of all the manufactured home parks in the U.S.

The Private Equity Stakeholder Project (PESP) is a nonprofit organization with a vision to bring transparency and accountability to the private equity industry and empower impacted communities. Follow PESP at pestakeholder.org and on X/Twitter @PEstakeholder.

Freddie Mac’s Single-Family Seller/Servicer Guide (Guide) Bulletin 2024-7 announces updates pertaining to: Builder forward commitments, Warranty of completion alternatives, First-generation homebuyer mortgages, Flood insurance premium used when calculating the housing expense-to-income and debt payment-to-income ratios. Custom and lender-paid mortgage insurance, and Community land trust mortgages.

As a follow up to Freddie Mac’s April 15 Industry Letter about the treatment of buyer agents’ commissions paid by property sellers or their agents, please read this FAQ .

To stay competitive in the current housing market, it’s vital for lenders to be open to new property types and the new borrowers they may attract. One market with high potential, especially in affordable areas, is properties with accessory dwelling units (ADUs). Freddie Mac allows borrowers to include rental income from an ADU in an amount up to 30 percent of the total stable monthly income used to qualify their mortgage application when the income is generated from a subject 1-unit primary residence. Learn more, view ADU Benefits.

In June, Fannie Mae’s Selling Guide has been updated to add Special Feature Code 887 for loans delivered using a standby commitment, updates the glossary definition of closing costs, expands timeframes for completion of counseling and eliminating Form 1017, retires the requirement for a completed Form 2200 at loan delivery, and other miscellaneous updates. View Fannie Mae Announcement SEL-2024-04 for more information.

Fannie Mae expanded the time allowed to complete housing counseling to qualify for the $500 LLPA credit for HomeReady® and HFA Preferred purchase loans. Starting June 5, borrowers can now complete housing counseling from a HUD-approved agency within 12 months prior to loan closing. Visit Fannie Mae’s housing counseling webpage to learn more.

Effective with applications on or after June 7, Pennymac aligned with Freddie Mac Bulletin 2024-6 regarding expanding eligibility for attorney opinion of title letters: Penny Mac Announcement 24-54.

Halcyon officially announced it is integrating with Fannie Mae’s Desktop Underwriter® (DU®) validation service. Learn more about how Halcyon is solving one of the biggest pain points in origination and post-closing. It’s time to switch from the 4506 to Halcyon’s Tax Transcript solution.

Capital Markets

The Fed doesn’t love you. Or maybe I should say that the Fed is “bond-supportive,” as bad news for the economy has become good news for the central bank. A day after Federal Open Market Committee officials voted unanimously to keep the benchmark federal funds rate range at a two-decade high range of 5.25 percent to 5.5 percent, first reached last July, those same officials were indubitably happy yesterday to see initial applications for U.S. unemployment benefits jump (+13k) to the highest level (242k) in nine months. A tight job market, highlighted again in May’s employment data, has been the main driver of caution amongst Fed members about cutting rates before inflation is consistently lower.

Policymakers signaled on Wednesday that they expect to cut rates only once this year, compared to the three reductions that were forecast in March. There is some chatter that price increases slowing in May are a sign that stubborn inflation numbers in the U.S. earlier this year may have been a blip rather than a trend.

Fortunately, for those who dislike volatility, the market is on board with the idea that the Fed will maintain interest rates at current levels. That is a departure from the recent hope-springs-eternal mindset investors had that the Fed would act in a more dovish fashion to tame inflation over the course of this tightening cycle. After we learned Wednesday that a key measure of consumer prices cooled in May to the slowest pace in more than three years (core CPI also slowed more than expected to 3.4 percent year-over-year), data released yesterday showed producer prices unexpectedly dropped in May (0.2 percent) by the most in seven months, a reading that should boost the Federal Reserve’s confidence that inflation continues to moderate. The report will factor favorably in the PCE Price Index, which is the Fed’s preferred inflation gauge.

In addition to the PPI news, a solid 30-year bond yield helped Treasury prices climb yesterday. We know that when prices rise, rates fall, and mortgage rates in the U.S. fell for a second straight week. The average for a 30-year fixed rate was 6.95 percent, down from 6.99 percent last week, Freddie Mac reported yesterday. For context, average 30-year conforming interest rates have only exceeded 7.02 percent on 120 market days in the past 20 years, per Optimal Blue.

May import and export prices led off today’s calendar. (Forecasts were for respective declines of 0.3 percent and 0.2 percent after increases of 0.9 percent and 0.5 percent in April.) Later today brings the first look at June Michigan sentiment (expected to increase), and two Fed speakers are currently scheduled: Chicago President Goolsbee and Governor Cook. We begin Friday with Agency MBS prices better by .125-.250 from Thursday’s close, the 10-year yielding 4.19 after closing yesterday at 4.24 percent on the pleasing news that lower inflation could provide a steppingstone for the Fed to lower rates, and the 2-year at 4.67.

Employment

“Evergreen Home Loans is proud to announce our recognition by Experience.com as a Top 10 Mortgage Company in the Medium Division category for the 2023 Top Performers in Customer Satisfaction! This prestigious honor underscores our commitment to delivering exceptional home loan experiences. Additionally, several of our outstanding loan officers have made the Top 1 percent list for Customer Satisfaction: Cathy Pizzini, Dylan Langei, Kendra Graybeal, Melissa Foster, Nicole Walker, and Siara Jay. These achievements highlight the dedication and excellence of our team. If you’re passionate about providing top-notch customer service and want to join a supportive, dynamic work environment, Evergreen Home Loans is the place for you. Explore current opportunities here. Join us and make a difference every day!”

Home lending leader Mark Allen has joined the eastern United States team of employee-owned USA Mortgage. Allen was recruited to USA by Jim Bromwell, who recently came on board as regional manager. Allen, active in the industry since 2000, will focus on growing the lender’s market share throughout the New England states. “As a 100 percent employee-owned company, USA Mortgage creates a true alignment internally where everyone is invested in its success. Joining Jim’s team also allows me to be part of a group that aligns with my values and reflects a shared passion for the industry,” commented Allen. “Additionally, USA leadership is committed to investing in future growth, specifically New England.” Founded in St. Louis in 2001, USA has offices in 34 states and is licensed in 49 states plus the District of Columbia. To initiate a confidential conversation about joining USA, contact us here.

On the heels of the MBA Secondary in NY and almost 100 client meetings, the AmeriHome team wants you to know that they are listening. Based on client feedback, AmeriHome will focus on developing the products and services that its clients need. To enable that, AmeriHome is hiring in several key areas, including underwriters and a Salesforce Admin! Check out the Careers page for details on all open jobs.

Are you a Retail production team or company looking to be acquired or interested in a “capital partnership” to help drive your organization’s scale across 50 states? A 49-state licensed mortgage lender with a large servicing and strong capital base, seeking to expand retail footprint by partnering with large production teams or regional mortgage banks interested in a capital partnership. The goal of the relationship is to leverage back-office mortgage functions (e.g., secondary, technology, compliance, operations, and licensing) to provide you with long-term production growth opportunities. If you are a strong retail loan origination team feeling limited by management, or an independent mortgage lender looking for new options for your team, we offer a compelling alternative to standard “branch” offerings. Confidential and serious, email Chrisman LLC’s Anjelica Nixt.