Pricing, POS, Broker to banker, Cybersecurity Tools; STRATMOR/Teraverde Deal Inked

Attendees of next week’s MBA Secondary conference can look forward to… A giant hot dog in Times Square that spits out confetti at high noon. (Keep your risqué comments to yourself please.) They can obviously look forward to much more at the actual conference, including information about the economy, regulators, and seeing what the Agencies and aggregators are up to in terms of products. Every client is important, and originators want a full product suite from their companies and vendors. (The current STRATMOR blog is titled, “Down Payment Assistance Programs Helpful But Not a Universal Remedy.”) For good news, homeowner equity has hit almost $17 trillion, as values in March hit a historic all-time high according to a report from Intercontinental Exchange. But looking at units this year (a better measure than the estimated $1.5-2 trillion) the MBA expects the lowest production in decades. If recent conferences are any indication, look forward to attendance being down, but spirited and with a good “vibe.” (Found here, this week’s podcasts are sponsored by LoanCare. The mortgage subservicer is known for delivering superior customer experience through personalization and convenience. Its award-winning portfolio management tool, LoanCare Analytics, supports MSR investors with a focus on customer engagement, liquidity, and credit risk. Hear an interview between JVM Lending’s Jay Voorhees and Robbie on thoughts for the future of mortgage origination.)

Lender and Broker Software, Products, and Services

Digital security threats continue to increase in prevalence and complexity… Are your processes protected? A recent report attributed this rise to misconfigured cloud environments, more aggressive ransomware, and the exploitation of vendor systems. Addressing mortgage servicing vulnerabilities to these security threats is vitally important and requires a rigorous commitment to ensuring you and your clients are engaging in a secure environment. Clarifire’s recent blog, “Collaborative Security Strategies Combat Digital Threats for Mortgage Servicers,” takes a closer look at the robust security measures, processes, certifications, and collaboration necessary in today’s world of cyber-attacks. Committed to pioneering innovative approaches to operational excellence, Clarifire is focused on STAR Level One and Two Attestation, as well as the role of SSRM in building a successful strategy for collaborative security. Learn more about industry trust and security with CLARIFIRE®, truly BRIGHTER AUTOMATION®.

ICE has launched MSP® Digital Experience (MSP DX), the new conversational user interface for the industry-leading MSP loan servicing system. MSP DX is making servicing simple for back-office teams by replacing traditional screens and menus with intuitive chat-like interactions. Using everyday language, anyone working in MSP DX can simply type in the description of a servicing task they want to perform, after which the system will automatically call up the relevant information. Read the press release from ICE to learn how MSP DX is helping teams work smarter and faster while providing more consistent service levels for homeowners.

“Mergers and acquisitions transactions demand a complete suite of experienced professionals to drive successful outcomes. That’s why CWDL’s mortgage accounting experts have partnered with Firstline Compliance and Garris Horn LLP, leaders in mortgage banking compliance and legal support, respectively, to bring you a best-in-class, holistic team of M&A professionals. Under one umbrella, you have seamless access to the specialized services needed to find the right target, shape the deal, execute the transaction, and deliver on your long-term objectives. Whether you’re interested in finding potential acquisitions or would like to explore selling your business, visit our website to submit your confidential inquiry, or contact Kasey English to discover how working with the integrated mortgage team at CWDL, Firstline Compliance, and Garris Horn can help you achieve your strategic goals.”

Click n’ Close looks forward to seeing you at Texas MBA Secondary and MBA Secondary with a handful of innovative products in tow. Most recently, Click n’ Close’s SmartBuy product suite has expanded to offer a shared appreciation program, offering a below-market interest rate for first-lien FHA and USDA loans and a repayable down payment assistance (DPA) second lien in exchange for up to 40 percent of the home’s appreciation during the first five years. DPA with Shared Appreciation is available through Click n’ Close’s retail and wholesale divisions. Not to mention, SmartBuy DPA program has provided more than 1.5 billion dollars in DPA-related financing to over 6,000 borrowers, with an average of nearly $12,500 in assistance per transaction. Unlike other DPA programs, SmartBuy isn’t subject to budgetary shortfalls and offers flexibility to accommodate a wide range of scenarios to help your borrowers achieve homeownership. Book a meeting at TMBA Secondary with Julas Hollie or Michael Lima at MBA Secondary.

In the wake of frequent breaches within our industry, we are reminded of the precarious position mortgage lenders and their customers’ data are currently in. These repeated security incidents emphasize an undeniable truth: robust cybersecurity defenses are not merely an option; they are imperative. A breach can mean the difference between a thriving business and a devastating collapse. There is a very real risk to mortgage companies right now; you’re not just guarding data, you’re safeguarding trust, livelihoods, and the very integrity of the financial system. It’s a responsibility to take seriously, and it’s time to double down on cybersecurity. Richey May’s cybersecurity team is here to help: check out its latest post detailing the often-overlooked risks in the industry.

Concerned about market volatility? Count on AmeriHome to be there for you! Built on the core tenets of Relationships, Reliability and Results, AmeriHome has been and will remain a rock-solid partner. Making the jump from broker to banker? Check out AmeriHome’s Emerging Banker program that includes access to Non-Delegated Correspondent tools and products, a client support team dedicated to new bankers, and access to warehouse lines, treasury management services, and small business financing through their relationship with Western Alliance Bank. AmeriHome is a proud recipient of Freddie Mac’s 2023 RISE Award for excellence in originating Home Possible and HFA Advantage mortgages and now offers the VLIP program through HomeReady and Home Possible programs! The programs provide $2,500 towards down payment or closing costs to eligible borrowers. The AmeriHome team is attending TMBA’s 108th Annual Convention and MBA Secondary Market Conferences in May: check Upcoming Events for details, find your sales representative, or email them to learn about connecting with AmeriHome.

Borrowers expect you to make it easy for them to do business with you. You do this by having a gorgeous online application, easy document upload and SMS loan updates, all beautifully integrated into Encompass® by ICE Mortgage Technology™. Check out LiteSpeed by Lenderlogix and give your loan officers the POS they’ve been asking for.

Mergers and Acquisitions

The STRATMOR Group and Teraverde announced a strategic merger! Mortgage advisory firm STRATMOR Group is excited to announce its recent merger with award-winning mortgage advisory and technology solutions provider Teraverde. Both firms will operate under the STRATMOR brand in the near future. The new firm combines each company’s respective programs, technology, and subject-matter expertise to deliver best-in-class advisory solutions to now serve the entire mortgage banking spectrum. Combining their respective services and product offerings will enable them to guide lender and vendor clients alike to make smart strategic decisions that drive efficiency and profitability. Read more about the merger or contact STRATMOR CEO and Senior Partner Lisa Springer to learn more.

Agency and Investor News

For folks who like some historical perspective, when the GI Bill became law in 1944, it included a home loan program for Veterans. After several changes to update the law to reflect current market prices and challenges, one area still needed addressed: support for Veterans who were dependent on wheelchairs for mobility. The answer was the Specially Adapted Housing program, and one of the earliest homes built with the grant money was designed by acclaimed builder Frank Lloyd Wright.

The overwhelming majority of VA and FHA loans are used to create Ginnie securities, and business is solid. Ginnie Mae’s mortgage-backed securities (MBS) portfolio outstanding grew to $2.57 trillion in April, including $34.8 billion of total MBS issuance, leading to $14.1 billion of net growth. The April issuance includes $34.2 billion of Ginnie Mae II MBS and $549 million of Ginnie Mae I MBS, including $463 million in loans for multifamily housing. For the 2024 calendar year to date, Ginnie Mae has supported the pooling and securitization of more than 190,000 first-time homebuyer loans. View the Ginnie Mae Press Release for details.

USDA Rural Development bulletin: Updates to HB-1-3555, Chapters 9, 10, and 16.

The Single-Family Housing Guaranteed Loan Program (SFHGLP) announced revisions to technical Handbook 1-3555, Chapter 9, Income Analysis; Chapter 10, Credit Analysis; and Chapter 16, Closing the Loan and Requesting the Guarantee. These changes became effective upon the recent issuance of a Procedure Notice (PN).

Pennymac updated Jumbo LLPAs effective for all Best Efforts Commitments taken on or after Wednesday, May 8th, view Pennymac Announcement 24-44.

The New York sub-prime test can be a challenge for some Non-QM lenders, but Carrington Mortgage is able to offer its full suite of Non-QM solutions to your New York borrowers including real estate investors, ITIN and self-employed borrowers.

HighTechLending Wholesale now offers a new Jumbo Proprietary Reverse Product, the Platinum Reverse with three variations: Maximum LTV Fixed Rate, Adjustable Rate with a Line of Credit, Reduced LTV with a lower Fixed Rate.

Capital Markets

“Now more than ever, it is key to our clients’ profitability and survival that they inform their front-end originator pricing with the back-end best execution tools they are using to sell their loans every day.” Learn how the MCT Base Rate Generator is changing the pricing landscape from Chris Anderson and Luke Chang of MCT as well as Brian Gilpin of Embrace Home Loans and Jessica Chen of Inspire Home Loans. The solution combines live agency API connections, co-issue executions, aggregator pricing, and custom TBA indications with decades of experience advising clients on custom rate sheet creation. Originators interested in learning more about the industry-first features included in Base Rate Generator should register for the upcoming webinar on June 4th.

Polly, operator of the industry’s first and only cloud-native, commercially scalable pricing engine, continues to make headlines. The latest in a string of notable press and media mentions: Polly Asserts Dominance in Mortgage AI/ML, Unveils Polly/™ AI (May 7, 2024) and All Western Mortgage Adopts Polly’s PPE to Supercharge Agility and Deliver an Exceptional LO Experience to Sales Force (May 14, 2024). To learn more about how Polly continues to pioneer mortgage industry transformation, #MBASecondary24 attendees are encouraged to schedule an on-site meeting with the Polly team, attend the MBA’s Tech Showcase on the state of PPE and secondary software, or visit Polly at booth 102.

Turning to the bond markets and interest rates, consistent with a “two steps forward, one step back” return to inflation near the Fed’s 2 percent target, the rate of increase in U.S. consumer prices eased in April for the first time in six months to its lowest year-over-year increase since mid-2021. This report isn’t enough for the Fed to cut rates soon but certainly preserves the possibility of rate cuts later this year.

Much of the slowdown in core inflation was because of falling car prices and a slower increase in shelter costs. Separately, retail sales stagnated and were revised lower for both February and March. The cooling combo of reports yesterday spurred investor bets the Fed can cut interest rates as early as September, but Minneapolis Fed President Kashkari wasn’t convinced, and reiterated his view that policymakers should hold “a while longer.” Bonds rallied strongly by yesterday’s close, sending yields to five-week lows.

Following yesterday’s consumer prices and retail sales reports, today’s calendar kicked off with more inflation data. Import and export prices (+.9 and +.5 percent, respectively), along with housing starts (+5.7 percent), building permits (-3.0 percent), Philadelphia Fed manufacturing (fell to 4.5, below expectations of 8), and weekly jobless claims (222k; continuing claims 1.794 million). Later today brings, April industrial production and capacity utilization, Treasury announcing the auction sizes for next week’s 20-year bonds and reopened 10-year TIPS auctions, Freddie Mac’s will Primary Mortgage Market Survey, and no fewer than five Fed speakers. We begin the day with Agency MBS prices better by a few ticks (32nds) better in price from Wednesday’s close, the 10-year yielding 4.32 after closing yesterday at 4.36 percent, and the 2-year yielding 4.75.

Employment

Teams, branches, and retail lenders seeking to join a top purchase lender, partner, or to be acquired wanted! GVC Mortgage, a 26-year-old strong family-owned retail lender, is looking to expand. With around $1 billion in annualized purchase volume, our team has a model that works, including allowing branches to operate as a d/b/a. Join one of the most stable and successful retail lenders in the Midwest to be a part of their national expansion. Send your confidential request to Chrisman LLC’s Anjelica Nixt.

“Are you exceptional at building and leading origination teams and are currently working for a company that doesn’t recognize your value as a manager? At Planet Home Lending, we understand that strong local leadership moves the dial on national success. You bring the insights from Main Street; we provide a dynamic platform where your ideas fuel product innovation and shape our operational strategies, all within the framework of a financially stable, multichannel ecosystem. Contact SVP Doug Long at (407) 399-5505 and explore how joining Planet can propel your career. Let’s build success together!”