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MBS Week Ahead: Lighter Data This Week as Markets Position for Fed Next Week

September 16,2018
by admin

September continues to be an unfriendly month for bonds, marked by an unfriendly trend that has carried yields almost exclusively higher. Some of the weakness can be chalked up to pent up selling demand that was on hold through the end of August, but economic data and supply situation (lots of bonds being issued by the time we count corporate debt) are responsible for the lion’s share of the movement.

Case in point, even with trade war fears, geopolitical uncertainty, and the Fed Funds rate rising just as quickly as markets expect, August still managed to offer up the highest readings in years in Manufacturing and Consumer Sentiment. Core inflation may have missed its forecast, but nonetheless remained over the 2% target. Wage growth rose to a post-crisis high in year-over-year terms, and the list goes on.

When the economy is churning out those kinds of numbers despite increasingly restrictive monetary policy, it makes sense for rates to continue higher. Our only ray of hope continues to be the ‘oversold‘ condition in longer-term momentum in 10yr yields. With the weakness seen early this morning, we’re one step closer to a potential bounce.

2018-9-17 open

If that materializes this week, keep in mind that it could be a somewhat shallow bounce as markets may want to hear from the Fed next week before doing anything too aggressive. There are really no top tier events this week in terms of econ data, although there may be trade-related updates that concern both Canada and China.

Downpayments Hit Record Levels

September 16,2018
by admin

There were quite a few recent milestones, high and low, noted in the Quarter 2 Residential Property Loan Origination Report from ATTOM Data Solutions. The report covers the 2.09 million 1 to 4 unit residential loans originated during the quarter, an increase of 15 percent from the first quarter but only 1 percent more than a year earlier.

One striking finding was the increase in the size of downpayments during the quarter – a median of $19,900, a record high in data going back to the first quarter of 2000. This is a 19 percent increase from $16,750 in the previous quarter and 18 percent from $16,925 in the same quarter last year. At a percentage, that represents 7.6 percent of the median sales price of the homes purchased with a mortgage during the quarter, compared to 6.6 percent in both of the two earlier periods. This is the highest median percentage down in nearly 15 years.

The number of loans with co-buyers, that is multiple, non-married buyers listed on the sales deed, also increased and those loans had average downpayments 51 percent higher than loans without co-buyers, $63,117 versus $41,749. Downpayments on co-buyer loans represented 16.3 percent of the purchase price, more than double the average percentage for other homebuyers of 8.1 percent. Nationwide 17.6 percent of all single family home purchases in Q2 were to co-buyers, up from 17.4 percent in the previous quarter.

No surprise that loans for refinancing were down 1 percent from the previous quarter and 2 percent year-over-year to the lowest level since the first quarter of 2014. Those originations totaled just under 800,000. The number of purchase loans jumped 39 percent compared to Q1, to 926,516 and were up 1 percent year-over-year. Home equity lines of credit (HELOCS) were originated at the highest level since the third quarter of 2008. The total of 361,845 was a 4 percent increase from the previous quarter and a 2 percent improvement over a year ago.

Rising mortgage rates are continuing to cool demand for refinance originations, which were down to their lowest level since 2014 – the last time we saw more than six consecutive months with average 30-year fixed mortgage rates above 4 percent,” said Daren Blomquist, senior vice president at ATTOM Data Solutions. “Meanwhile buyers are upping the ante when it comes to down payments, evidenced by the record-high median down payment for homes purchased in the quarter, and an increasing number of buyers are getting help from co-buyers.”

The ATTOM report is derived from publicly recorded mortgages and deeds of trust in more than 1,700 counties accounting for more than 87 percent of the U.S. population. Counts and dollar volumes for the two most recent quarters are projected based on available data at the time of the report.

Residential loans backed by the Federal Housing Administration (FHA) accounted for 10.2 percent of all residential property loans originated in Q2 2018, down from 10.9 percent in the previous quarter and down from 13.5 percent a year ago to a more than 10-year low. VA loans accounted for 5.4 percent of the total, down from 6.2 percent in the previous quarter and 6.4 percent a year ago.

Refinancing declined year-over year in 99 of the 173 metropolitan statistical areas (MSAs) analyzed in the report including Los Angeles (down 13 percent), Chicago (5 percent) Philadelphia (9 percent); Washington, D.C. (21 percent); and Atlanta (12 percent). Among the 74 MSAs where refinancing increased were New York (up 17 percent), Dallas-Fort Worth (15 percent), Houston (69 percent); Miami (31 percent); and Boston (23 percent).

Among the 103 MSAs in which downpayments were analyzed, it is not surprising that four of the five with the highest were high priced California cities. San Jose topped the list with a median of $305,000, followed by San Francisco, Los Angeles, and Oxnard-Thousand Oaks at $114,300. The fifth highest was Boulder, Colorado at $107,750. Many of these were also the areas with the highest share of co-buyers, with San Jose also topping this list at 49.3 percent. San Francisco, Honolulu, Seattle, and Miami made up the remainder of the top five.

Notary Product, New Correspondent Lender; Events and Training for September

September 16,2018
by admin

Given plenty of warning, and evacuations, the deaths in the Southeast from Florence have people wondering, “Why do residents stick around?” It is complicated, ranging from stubbornness to not having enough money to buy gasoline, but this NY Times article does a good job summarizing it.

Upcoming September Events

Momentifi CEO Gibran Nicholas is hosting a series of webinars this week to help loan originators create fourth-quarter sales momentum and generate purchase business from referral sources other than real estate agents. The lead topic is, “How to Generate 10 Extra Loans from Financial Advisors in the Next 90 Days.” Click here to sign up and forward the link to your loan officers. Separately, Momentifi is excited to launch its new enterprise API and sales technology that helps mortgage sales teams leverage enterprise CRM to create an extra $4 million in annual revenue from your tech stack and digital mortgage strategy. Click here to see a short overview. Gibran will be at the Digital Mortgage Conference today and tomorrow and you can reach out to him directly to schedule a meeting or demo.

Register now for the next FREE webinar, Customer Experience in the Digital Era, from the California MBA’s Mortgage Technology & Marketing Committee, on September 20th at 11AM PT. This month’s webinar is hosted by Charles Warnock of The Content Marketing Factory, and will feature Joe Dahleen, EVP & Chief Strategy Officer at MortgageHippo, Mikhail Cook, SVP Sales, EXOS Technologies at ServiceLink, and John Seroka, Principal of Seroka Brand Development. You’ll learn how to create and deliver powerful customer experiences and bring the “lender for life” concept closer to reality.

On September 20th, Plaza is providing a complimentary training webinar: Financial Planner’s Guide to Reverse Mortgages.

FHA is offering an online webinar, September 20th, on FHA Approval and Recertification Requirements.

Register for the California MBA Legal Issues Committee Webinar on September 20th. The presentation will include CFPB update, What’s new with Attorney-Client Privilege: Perspectives from Inside and Outside Counsels and impact of Perez vs Wells Fargo.

On September 23rd, MBA Education’s Advanced Risk Management Concepts Workshop is a must-attend course for any mid- and senior-level mortgage risk professional looking to solidify their skillset and bolster their industry knowledge. The course occurs in conjunction with MBA’s Risk Management, QA and Fraud Prevention Forum (RMQA18) in Los Angeles, attend both to save on registration fees* and get a comprehensive overview of the risk topics you need to be familiar with to succeed.

Register for the Ellie Mae live webinar on September 25th: Navigating Mortgage Mergers & Acquisitions: People, Systems, Culture.

Sign up for a HomeReady webinar, Wednesday, September 26th, hosted by Quicken Loans Product and Sales Experts.

And we have the September 27th Mortgage Quality & Compliance Committee (MQAC) webinar on “Advertising and Social Media Compliance”.

Capital Markets

Regarding natural disasters and economic conditions, Hurricane Florence is expected to impact things the same way as other events. At first weekly first-time unemployment claims will rise. September auto sales will fall, but October sales will spike due to buyers replacing flood damaged cars. Similarly, September employment growth will weaken, but will probably be upwardly revised the following month. Housing will also be temporarily depressed. Things tend to bounce back.

Rates are still expected to creep higher. The U.S. 10-year closed Friday at 3% after the release of an August Retail Sales report that was below estimates but contained an upward revision to the July reading. The news cycle centered around reports that President Trump is seeking to impose tariffs on another $200 billion worth of imports from China despite the recent efforts to revive trade talks. Other news of note includes Mary Daly becoming the President of the Federal Reserve Bank of San Francisco on October 1. And we learned that the preliminary University of Michigan Consumer Sentiment Index for September was the second-highest level since 2004 as positive sentiment was widespread across all major socioeconomic groups, a good sign for consumer spending activity.

There are several central bank decisions including the BoJ on Wednesday with the SNB and Norges Bank on Thursday. In the U.S. today’s calendar is light with only the September Empire State manufacturing Index (-6.6 to 19, whatever those mean). Tomorrow things pick back up slightly with the September NAHB Housing Market Index and July Net Long-Term TIC Flows. Wednesday brings the usual weekly MBA Mortgage Index, August Housing Starts, Building Permits, Q2 Current Account Balance, and weekly crude inventories. Thursday is Weekly Claims, the September Philadelphia Fed Survey, August Existing Home Sales, and August Leading Indicators. The week begins with rates a shade higher than Friday with the 10-year at 3.01% and agency MBS prices worse almost .125.

Lender Products and Services

11 MORTGAGE (Eleven Mortgage) announced the launch of its wholesale and correspondent lending platform. The management team averages 25 years of wholesale and correspondent lending experience and extensive relationships across the nation. The veteran sales management, account executives and support staff are powered by a proven operations team and a modern lending portal. 11 MORTGAGE is pleased to announce the nomination of Thomas Michel as the EVP head of wholesale and correspondent lending. Michel stated, “11 MORTGAGE is setting a new standard in the mortgage market. Our business is built on relationships, precision, and unparalleled service to make mortgage transactions easy for brokers and customers alike. Unprecedented speed and service beyond your expectations are at the heart of every loan. On a scale of one to ten, we are eleven… 11 MORTGAGE.

ARMCO Reduces Lender Data Validation Times by 50 Percent with DataSure™ – Technology validates data and automatically communicates corrections back to LOS. ACES Risk Management (ARMCO), the leading provider of technology for loan quality and compliance testing, data validation and analytics, announced the launch of DataSure™, a quality control technology that increases data validation accuracy and efficiency, and reduces lenders’ data validation task times by 50 percent or more. In a matter of moments, DataSure validates loan data for thousands of key data points within a lender’s source system (i.e. loan origination system) by cross referencing those data points against data contained in loan documents. It then automatically communicates all corrected data fields back to the lender’s source system. This assures data consistency and accuracy at each step of the loan process. DataSure also provides robust reporting capabilities, so lenders can identify the root causes of their data discrepancies and adjust their practices going forward. Read the press release.

From NotaryCam comes the true-life story of Dana Jackson, an Army wife whose husband was reassigned from Washington to Georgia. The Jacksons found a buyer for their home, but the closing date posed challenges: Dana was in Illinois visiting family, and her mother-in-law (a cosigner on the home) was in Missouri. The family’s title agent recommended NotaryCam’s remote online notarization (RON) service. The Jacksons used iPads and laptops to join a Virginia-based notary in a virtual signing room. “We were all connected and looking at each other from four separate states,” said Dana. “At first everyone had a little uncertainty … but it was easy and took just about 30 minutes. Seriously, the hardest part was picking the time to do it. After that, it couldn’t have run smoother.” If you’ve faced similar challenges and wished you had a customer-friendly solution, check out NotaryCam’s demo tomorrow at Digital Mortgage or email founder Rick Triola.

In its 54th consecutive and uninterrupted year providing warehouse lines to mortgage bankers, Comerica Bank is proud to recognize its team members for their dedicated service to the industry and their customers. The individuals on the Comerica Mortgage Banker Finance team average over 16 years in warehouse lending and 20 years in banking. Comerica Bank is also proud of its employees for their participation in the industry through support, advocacy, and volunteer efforts from Main Street to Washington D.C. The team of bankers at Comerica Bank is eager to learn about your business needs and grow with you. If you’re looking to diversify your lines or work with a more sophisticated warehouse partner, let Comerica Bank raise your expectations of what a bank can be. Please contact Von Ringger (313-222-9285). Member FDIC. Equal Opportunity Lender. Loans subject to credit approval.

Employment, Wholesale Business Opportunity, and New Positions

Inc. magazine has named Homespire Mortgage Corporation to its Inc. 5000 List of America’s Fastest-Growing Private Companies for 2018 for the second consecutive year. The list represents an exclusive ranking of the nation’s fastest-growing private companies. The company’s position at #1306 places Homespire Mortgage Corporation among an elite group of companies that achieved remarkable and sustained three-year growth and expansion. “To be named to this prestigious list for the second consecutive year is an incredible honor for Homespire Mortgage. It is a true testament to our sustained growth, our culture and our greatest strength of all, our people,” said Michael Rappaport, President & CEO. Since its formation, Homespire Mortgage Corporation has expanded its presence into 29 states and the District of Columbia. The company plans to expand its presence into new markets, including a national call center next year.

Nations Lending Corporation, a privately-owned mortgage lender headquartered in Independence, Ohio, has announced that Jordan Gerard has been promoted to the new role of Divisional Sales Manager. Gerard will oversee the company’s strategy to grow its retail footprint in all markets. Prior to this role, Gerard was a successful branch manager at Nations Lending running multiple offices in several states. “Jordan’s experience and success building several of our top performing branches from the ground up will serve Nations Lending well in his new role.” said Nations Lending CEO Jeremy Sopko. Nations Lending is a rapidly growing company that is looking to hire purchase focused originators across the country. For more information please visit the company’s website.

In MI news, Essent Guaranty is looking for Account Managers in the San Diego, CA and New England areas. Essent Guaranty, a leader in the mortgage insurance industry and a great place to work, is looking for a results-driven Account Manager to call on mortgage lenders, banks, and credit unions. Essent offers a very competitive compensation and benefits package and makes it easy for serious professionals to transition. As an Account Manager, you will drive profitable mortgage insurance business using a risk centric approach and a goal of delivering value and added credit enhancement solutions. If you have significant mortgage lending experience and a minimum of 5 years of relevant business development experience within the financial services, mortgage, secondary markets, capital markets or mortgage insurance industries, this may be the job for you. If you are interested in joining our team, please send a resume to Robyn Donnelly. Learn more about Essent Guaranty at

“We have outgrown our parent – a Nevada-based wholesale division currently funding $50 million a month in 10 states looking to find a new home. We currently operate with healthy margins and are well into the black each month, our growth has been slowed by warehouse capacity and limited take out investor options. Our business mix is over 60% purchase and we break down with 60% Conventional 35% FHA/VA/USDA & 5% Jumbo NON/QM. If you think we might be a fit for you please email we look forward to talking with you.”

Congrats to David Akre who recently assumed the EVP of Capital Markets role at Sprout Mortgage. Sprout is one of top originators of non-QM loans and channels include wholesale, correspondent and direct to consumer. (He’ll also be moderating the Jumbo and Non-QM panel at the upcoming ABS East conference September 24th in Miami where panelists include members of senior management from Deephaven, Angel Oak, and SG Capital.)

Mortgage Rates Jump to 4-Month Highs

September 14,2018
by admin

Mortgage rateshad a bad day. Even after a weaker reading on Retail Sales (something that normally helps), the bond market lost ground. Unfortunately, that’s consistent with the rest of the week as investors have largely shunned bonds. Lower demand for bonds = higher rates.

Perhaps “shunned” isn’t the perfect word. Investors are indeed buying bonds, but there have been so many to buy this week that sellers have had to lower prices to get them out the door. That’s a bit of an oversimplification of the how things actually work, but the dynamic of higher supply driving higher rates is at the heart of the issue.

Beyond that, investors are nervous about buying bonds too aggressively in an environment where wages are rising, retail sales are holding steady at long-term highs, consumer sentiment is setting long-term highs, and inflation is holding over 2%. All of the above is consistent with rates continuing to move higher, even if some of this week’s economic numbers didn’t hit their forecast levels.

The net effect for mortgage rates was a moderate move just past recent highs. From there, we’d have to go all the way back to the month of May to see anything higher. At this point, there’s not much room left between current rates and the highest levels in 7 years. The best thing rates have going for them is the extent to which it looks like they have nothing going for them! A bit of a paradox, I know, but keep in mind that “sure things” quickly get “priced in” to financial markets. At some point, the obvious need to push rates higher will have run its course, and we’ll be left with a paradoxical push in a more friendly direction to explain.

Today’s Most Prevalent Rates

  • 30YR FIXED – 4.625-4.75
  • FHA/VA – 4.25-4.5%
  • 15 YEAR FIXED – 4.125%
  • 5 YEAR ARMS – 3.75-4.25% depending on the lender

Ongoing Lock/Float Considerations

  • Rates moved higher in a serious way due to several big-picture headwinds, including: the Fed’s rate hike outlook (and general policy tightening), the increased amount of Treasury issuance to pay for the tax bill (higher bond issuance = higher rates), and the possibility that fiscal stimulus results in higher growth/inflation.

  • Despite those headwinds, the upward momentum in rates has cooled off heading into the summer months. This could merely be the eye of the storm, or it could end up being the moment where markets began to doubt that prevailing trends would continue.

  • It makes sense to remain defensive (i.e. generally more lock-biased) because the headwinds mentioned above won’t die down quickly. Temporary corrections can be explained away, but it will take a big change in economic fundamentals or geopolitical risk for the big picture to change. While that doesn’t necessarily mean rates have to skyrocket, there’s a good chance it means rates will struggle to move much lower than early 2018 lows until more convincing motivation shows up.
  • Rates discussed refer to the most frequently-quoted, conforming, conventional 30yr fixed rate for top tier borrowers among average to well-priced lenders. The rates generally assume little-to-no origination or discount except as noted when applicable. Rates appearing on this page are “effective rates” that take day-to-day changes in upfront costs into consideration.

MBS RECAP: September Trend is Not Your Friend

September 14,2018
by admin

August was nice. September is mean… at least if you’re a bond.

Investors wantedyou in August when it was still unclear whether or not Turkey was going to be a big deal for the global financial system, whether the trade war would spiral out of control, or whether the EU was seeing a disturbing shift in economic data.

What a difference a few weeks makes! Europe has reversed course, Turkey is “fixed,” we’ve had some very strong econ data, and trade war risks are roughly unchanged (which is positive in and of itself, because it means they’re not blossoming into the dire situations feared by some).

Bottom line, no one wants to pay very much for bonds right now. A moderately big miss in Retail Sales isn’t even enough for a token Friday morning rally. Paradoxically though, a big beat in Consumer Sentiment didn’t cause any more damage at 10am. That suggests ulterior motives behind the scenes.

We’ve often wondered aloud if tax deadlines have a random effect on bonds due to retirement account funding deadlines and the fact that retirement funds are some of the biggest bond market players. If that’s the case, things would start looking different as early as next Tuesday (corporate tax deadline Monday). Maybe just wishful thinking, but with 10yr yields at 3%, we’ll take whatever we can get.

MBS Day Ahead: How Did We End Up In This Mess?

September 13,2018
by admin

The question posed in the title is just a bit too big for us to cover in this humble “day ahead” post, but we can touch on a few key points. I just thought it was a good time to revisit it, given that 10yr yields are beginning the day once-again approaching the 3% barrier–something they’ve only done a few times since hitting all-time lows.

Following rate movement on a daily basis lends itself to overanalysis. In the biggest of pictures, the rate reality we’re seeing today is largely the byproduct of plans set in motion a year ago. Specifically, the tax bill that materialized last September did more than anything else to precipitate the slow-motion train wreck that we’ve lived through as stakeholders in an industry that’s highly dependent on rates. This is easily seen in today’s chart.

2018-9-14 Open

2yr yields have taken it on the chin for 2 reasons. First, the government said it would borrow more short-term than long-term debt in order to pay for the tax bill. Higher supply of US Treasuries pushes rates higher. Second, 2’s are more closely connected to Fed policy and the Fed is in the thick of a classic hiking cycle.

It’s tempting to blame the Fed for much of the current upward pressure in rates, but they’re simply reacting to the data and economic events. Tax bills and stimulus measures increase the risk of strong growth and inflation. As long as we keep getting strong econ data, the Fed will continue to be justified in hiking its policy rate.

As the chart suggests, after an initial reaction to all of the above, 10yr yields have tried to level off in 2018. The zone in which they’ve leveled-off represents traders’ best guess as to where all of the known inputs would leave rates. Simply put, the data and events from the second half of the year have suggested a bit of an upward adjustment to that zone, and that’s why we’re pushing the upper boundary of the consolidation range presently.

Trailing Doc, Tax, and Reverse Products; Vendor News; New Lender Programs

September 13,2018
by admin

“Rob, the number of vendors at mortgage conferences seems to be growing. Any idea how many vendors (vs. lenders) there are?” I had no idea but turned to Ginger Bell who keeps up with such things. She replied, “We’ve counted more than 1,400 that are specific to residential lending! And that doesn’t even count those outside of the industry that lenders may use such as insurance, payroll, etc.” Good luck keeping up with them. If your company doesn’t have a dedicated vendor manager, who’s in charge of deciding if, why, where, and when to use certain vendors? The CEO? Does she have time for vetting them?

Vendor News

Block66 recently announced the creation of a platform that aims to reduce mortgage fraud by imbuing the mortgage origination process with a heavy dose of transparency and tamper-proofing controls. Block66’s blockchain technology will play the role of a mortgage hub, functioning as a one-stop shop where borrowers’ pay stubs, financial information, tax documents, and personal identifiers can be accessed by parties who require them. By deriving these documents from their original sources and storing them on the blockchain, the platform will represent an immutable, trustworthy, and interoperable resource that is far less vulnerable to fraudulent actors.

The American Bankers Association announced its endorsement of the comprehensive mortgage fulfillment solution that Promontory Fulfillment Services (PFS), a unit of Promontory MortgagePath, offers to community banks throughout the country. “PFS’s white-label mortgage fulfillment services are designed to give banks new and better options in terms of cost, compliance and customer experience, enabling banks to offer a full range of mortgage products—conventional, jumbo, non-agency and HELOCs without the need to build and maintain a mortgage operation. Through the mortgage fulfillment solution, PFS underwrites the loan using client-provided business rules then processes and closes the loan in the bank’s name. Ongoing compliance reviews are done throughout the process and post-closing. PFS then delivers the loan to the client or sub-servicer.”

LendingQB and BNTouch have completed a full integration between their two platforms. This combining provides mortgage lenders an easy solution to grow their mortgage businesses from lead generation through loan origination and funding, seamlessly connecting all parts of a lender’s business. The systems communicate through a custom API integration that passes more than 300 points of data between the two systems. A potential borrower completes an online loan application on a loan officer’s website and the 1003 is placed as a lead into the loan officer’s BNTouch CRM. Once the loan officer initiates the loan process in LendingQB, the API integration kicks in. Deep communication between LendingQB and BNTouch allows for real time automated marketing to take place between the loan officer and their borrowers without the loan officer having to lift a finger.

New Lender Products and Programs

Home Point Financial Corporation announced the launch of Home Point Rewards, a new home buying and selling program, powered by HomeStory. Home Point Rewards connects buyers and sellers with select real estate agents and Home Point loan officers. Upon closing of their property, participants can receive up to $6,500 in cash rewards. “Who couldn’t use cash rewards when buying or selling a house,” said Brian Brizard, Chief Business Officer of Home Point Financial. “We’re excited to offer this innovative program to our customers and real estate partners.”

The Preferred Medical Professional Program is tailored to meet the needs of residents, medical doctors within 10 years of residency, dentists, orthodontists and veterinarians. EverBank has designed its lending guidelines to maximize their money and even exclude student loan debt in certain cases and allow newly license medical students who are about to begin their new employment/residency within 60 days of closing the use of future income.

Royal Pacific Funding introduced its Royal Reverse Mortgage. Send an inquiry email to if you would like an AE to contact you with more information.

CoreVest announced an expansion of its term loan program for investors in single family rental properties. CoreVest will now offer a 7-year term to complement the company’s existing 5- and 10-year term loan options. “After participating in the Freddie Mac rental finance pilot program, we realized investors wanted more options to suit their specific investment timelines. Adding the 7-year option will enable us to fully address the needs of investors who may have been considering a GSE loan and are looking for a comparable alternative,” relayed Ryan McBride, COO of CoreVest.

The Lending Answer offers SIVA transactions with rates starting @ 4.75%. No Income Documentation of any kind is required. Available to Owner Occupied Borrowers and with financing solely requiring reserves to meet ATR guidelines.

Plaza’s AUS Non-Conforming Program “allows for AUS (Automated Underwriting System) documentation requirements to help cut down on all the paperwork that’s often required with these types of lending programs. With the AUS Non-Conforming Program, you get the combined ease of Desktop Underwriter® (DU®) findings with a non-conforming program for a more simplified origination and better pricing than with bank statement or other alternative products. The program is a great option for conforming loans that don’t quite meet certain GSE requirements.”

The state of Michigan has been added to the Plaza Home Mortgage Manufactured Housing Pilot program. The USDA Guaranteed Rural Housing program guidelines have been updated to include Michigan as an eligible property state.

Do you need to Qualify your borrower off a Verbal VOE or only just a Business License? Pacific Bay Lending Group has a starting rate of only 5.25% on a 7/1 Arm, Purchase or Rate and Term, Minimum 680 Fico, Max 70% LTV with Loan Amounts up to 2.5 Million. Owner, Non-Owner and 2nd Home Allowed. Available for SFR, 2-4 Units, and Condos. Available in CA and NV only.

Using bank statements for income is an excellent choice for Business owners with write-offs. Contact LoanStream Mortgage, to learn about its Fixed Rate, 5/1 and 7/1 ARM’s up to $10,000,000. Interest Only options are also available.

Brett Vargo VP, Mortgage Operations at Iserve Lending (San Diego, CA) says, “DocProbe has very capably enabled us tackle one of the biggest ‘necessary evils’ in our industry: trailing docs. Gone are the days of carving out our valuable resources to chase down documents, of having mounds of paper piling up in a cubicle to scan and deliver. Most importantly, gone are the days of having to pay late fees for missing or delayed documents! DocProbe has delivered on every promise thus far and has provided us the benefits of improved efficiencies and cost savings. Plus, their team is top notch, delivering incredible service.” Richard Scudder and Tani Lawrence will be attending the MBA Annual in Washington DC in October. Reach out to learn why prestigious correspondents and investors from coast to coast, large and small, are using DocProbe to manage their Trailing Docs.

ReverseVision is now offering enhanced software functionality and professional services to help lenders launch proprietary reverse mortgage products. Proprietary reverse mortgage products fill borrower needs not addressed by HECMs and insulate reverse mortgage operations from the effects of HUD changes to the HECM program. Proprietary reverse mortgages can expand access to home equity for seniors with home values much greater than the HECM maximum claim amount of $679,650. Proprietary products also have more flexibility for condominiums than HECMs and provide opportunities to lend to borrowers younger than HECM’s minimum age of 62. Designers of proprietary reverse mortgages have even begun adding options like monthly term payments to their products. The process for setting up a new proprietary product in ReverseVision is simple. After designing the product and its accompanying document package, lenders should contact Wendy Peel.

Every mortgage company president, VP, and operations manager want their team to close more loans, cleaner and faster. Current customers of LoanCraft’s Tax Return Analysis have reported anincrease in their underwriter’s production by 35%. Their underwriters can review files much quicker, and less “bad deals” are making their way to the underwriting desk. Loan Officer’s love the service because they get quick answers on whether the income will work in the beginning of the process. Underwriters love it because they can focus on analysis, not compiling data and requesting returns. LoanCraft has developed a service that produces a report of your borrower’s income. Features in the report assist each department to help them identify areas of concern or potential for more income. Contact Lindsey Fougerousse at 248-897-0604 or visit for more information.

Capital Markets

Rates were unchanged yesterday after the release of an in-line August CPI and a worse than expected core CPI, which followed similarly disappointing PPI figures from Wednesday. Atlanta Fed President Raphael Bostic spoke, saying he expects gradual rate hikes to take place over the “next handful of quarters.” Internationally, The Bank of England voted 9-0 to keep key rate and asset purchase program at their respective 0.75% and GBP435 billion. The outlook for Q3 GDP growth was increased to 0.5% from 0.4%. The European Central Bank made no changes to its interest rate path, and confirmed that monthly asset purchases will be reduced to EUR15 billion in October and continue through December

This morning we’ve had August Retail Sales (+.1%, weak) and August Import Prices ex-oil (-.6%, lower than expected). August Industrial Production (prior 0.1%) and Capacity Utilization (prior 78.1%) are both due out at 9:15 ET before July Business Inventories (prior 0.1%) and Preliminary September Michigan Sentiment Index at 10:00 ET. We also will have some Fed speak from Chicago Fed President Evans. Rates are a shade higher than last night with the 10-year at 2.99% and agency MBS prices worse a couple ticks.

Employment, Business Opportunities, and Promotions

As one of the largest outsource providers in the United States, Digital Risk, LLC, is looking for experienced professionals in Mortgage Business Development (Capital/Secondary Markets & Due Diligence). The ideal candidates will have established relationships in the financial sector, the requisite experience for the specified role and a proven track record of success. If interested in one of these roles, email for more details or view our postings at

Northpointe Bank is pleased to announce that Jason Lee has been named as Senior Vice President, Capital Markets. “In this leadership role, Lee will lead Northpointe’s pricing, trading, hedging, loan sale strategies, and is a member of the company’s executive loan committee. Lee has worked in the residential lending business for more than 20 years, with leadership positions at some of the nation’s largest mortgage lenders. Most recently, he served as SVP of Capital Markets for Caliber Home Loans since 2011, overseeing over $45 billion in annual production at one of the country’s largest mortgage origination and servicing companies. Prior to that, Lee led capital markets for Freedom Mortgage, and held management positions with Quicken Loans and US Bank Home Mortgage.

Towne Mortgage Company is looking for experienced Account Executives with a book of business throughout the Southeast, Mid-Atlantic, Texas, Ohio, Northern Illinois, Western Pennsylvania and Iowa. This position will have access to multiple operation centers and a wide range of product offerings including FHA, 203K, Fannie Mae HomeStyle, HomePath, HomeReady, DU Refi Plus, VA, USDA, and Manufactured Programs. Towne is looking for a seasoned, high-energy, salesperson who can partner with Towne to expand their lines of business. We are looking to fill positions in our financial institution channel working with Banks, Credit Unions and AgBanks as well as our traditional broker channel. Delivery mechanisms include both wholesale and mini-correspondent relationships. Towne offers competitive compensation packages including Medical and 401K. Sound Interesting? Email Cassi Sluka.

The market is shifting, rates are on the rise, refinances are down and the competition is intensifying. Are you an Orange County Single Family Mortgage Banker or Broker looking to expand into new programs and products including Multifamily, Commercial, SBA and Bridge? An Orange County-based lender and broker of Multifamily, Commercial, SBA and Bridge is looking for a strategic relationship to capitalize on the best of both platforms. Send me a confidential note of interest.

Caliber Home Loans, Inc., one of the nation’s fastest growing mortgage companies, has promoted Jordan Licht to Chief Operating Officer, Production, replacing Phil Shoemaker. Jordan joined Caliber from Morgan Stanley and has a deep background in mortgages – and he’s highly respected in the industry. To continue Caliber’s growth in the Non-Agency segment, Danny Horanyi has been named the new Head of Non-Agency lending. Danny recently rejoined Caliber from loanDepot. Historically he’s been one of Caliber’s top producers in Retail and was a consistent Circle of Excellence winner. Caliber CEO Sanjiv Das said, “I’m delighted to recognize these individuals who have proven track records of leadership and success. I’m confident these changes will help us accelerate our growth, improve our competitiveness and continue to position Caliber as the most highly regarded non-bank lender in the industry”. If you’re interested in joining one of the industry’s most dynamic, high-growth teams, contact Jeremy DeRosa.

Lower Priced Homes Driving New Home Sales

September 13,2018
by admin

While applications for financing new home purchases declined in August, the Mortgage Bankers Association (MBA) is predicting a bump in the month’s new home sales. The MBA’s Builder Applications Survey (BAS) data for August show mortgage applications for new home purchases decreased 2.0 percent from applications in July and were down 4.6 percent compared to August 2017. This change does not include any adjustment for typical seasonal patterns.

Based on the information from the BAS as well as assumptions regarding market coverage and other factors, MBA estimates new single-family home sales were running at a seasonally adjusted annual rate of 669,000 units during the month. This is a 5.0 percent improvement over the July pace of 637,000. The MBA estimates that 53,000 new homes sold during the month on an unadjusted basis.

“Our seasonally-adjusted estimate of new home sales increased five percent over the month, the second straight monthly increase. Low inventory of homes for sale has been an issue this year, and newly constructed units have been one way to ease the shortage. Growth in August was focused in the lower price tiers. In fact, for the first time in four months, monthly growth was driven by the lower half of the market, based on application size,” said Joel Kan, MBA Associate Vice President of Economic and Industry Forecasting.

Applications for conventional loans composed 71.4 percent of the total received and 15.6 percent were for FHA-backed mortgages. VA loans accounted for 11.8 percent and RHS/USDA loans for 1.2 percent. The average loan size of new homes decreased from $337,775 in July to $332,801 in August.

MBA’s Builder Application Survey tracks application volume from mortgage subsidiaries of home builders across the country and uses the data to provide an early estimate of new home sales volumes at the national, state, and metro level. Official new home sales estimates are conducted by the Census Bureau and the Department of Housing and Urban Development on a monthly basis. In that data, new home sales are recorded at contract signing, which is typically coincident with the mortgage application. The official sales report for August will be released on September 26.

CoreLogic: Hurricane Florence Losses Estimated at $3 to $5B

September 13,2018
by admin

Even as Hurricane Florence is pushing unprecedented levels of flood waters into North and South Carolina homes, CoreLogic is issuing estimates regarding the storm’s dollar costs. Their analysis shows that insured property losses for both residential and commercial properties will be between $3 and $5 billion.

CoreLogic basis its estimates on the National Hurricane Center’s 8 a.m. September 13 track of the storm and the cone of uncertainty. Florence made landfall mid-morning on September 14 near New Bern, North Carolina and 250,000 homes in that state are projected to be affected by the hurricane. Losses in North Carolina are estimated to be between $2.5 and $4.5 billion and South Carolina is expected to suffer to the tune of $0.3 to $0.5 billion.

This includes wind damage and the storm surge but does not include rainfall or flooding from rivers and other sources. The company says the latter cannot be estimated as the full rainfall footprint is an element in computing the number and it is too early to forecast those losses. Florence seems to have been particularly confounding to those trying to chart her path, partially because she has moved so slowly.

The table below indicates expected losses in the most coastal counties in North Carolina and the Myrtle Beach area of South Carolina at the two-state border in the case of either a Category One or Category Two landfall. The table does not consider inland flooding. Certain counties will receive both Category 1 and Category 2 impacts because the properties closer to the coast are likely to experience stronger winds relative to the more inland properties. In particular, it is expected that South Carolina will not exceed tropical storm force winds based on the projected track and is therefore not included in the table.

The Florence losses are expected to be larger than the three most recent historic hurricanes if those events were to occur today with the current property exposure. Bertha (1996), Bonnie (1998), and Floyd (1999) were all Category 2 storms at landfall. Both Bertha and Bonnie were $2 billion storms while Floyd caused $4 billion in claims. The three had different tracks but were comparable to Florence in terms of their wind impacts. The higher costs expected from Florence are due to the significantly greater storm surge losses that are expected. None of the numbers include inland flooding losses.

MBS RECAP: Bonds Refuse to Rally Big After CPI’s Big Miss

September 12,2018
by admin

Bond markets were clearly interested in today’s Consumer Price Index (CPI) data. It generated a larger single minute of volume than the minute following last Friday’s NFP report (the one that caused bonds to tank due to the wage growth component). Given the much weaker reading, it was no surprise to see bonds rally fairly well for the next hour. The surprises showed up from there on out, however.

Rising European bond yields and advancing equities caused a quick correction for Treasuries and MBS–both of which briefly returned to negative territory. We managed to shake off the weakness as the European session wound down, but without making it back to the better levels of the day. No matter! Perhaps investors were waiting to digest the 30yr bond auction.

But the auction was no help. Even though the demand metrics for the 30yr bond auction were on the strong side, there was no visible market reaction. Starting at 3pm, Treasuries began selling off again on a combination of Fed-speak and corporate bond issuance (particularly one multi-billion dollar deal from AbbVie–a name that’s hurt bonds before with a big corporate deal). By the end of the session, Treasuries were back into negative territory (just barely) and Fannie 4.0 MBS were holding on to microscopic gains.