Lykken on Lending

 

 

The Lykken on Lending program will feature our Weekly Mortgage Updates with Adam DeSanctis and his MBA Mortgage Minute, and then Les Parker’s TMSpotlight, a macroeconomic perspective on the economy with a music parody. That leads to Matt Graham of MBS Live providing you a rate and market update, followed by Alice Alvey of Union Home providing a regulatory and legislative update. Then we wrap up the first half of the program with Allen Pollack giving us a Tech Report of the latest technology impacting our industry. All the while Jack Nunnery who has a 38-year career in mortgage banking, and David will be expounding on each of the regular segments.

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Weekly Mortgage Updates With Adam, Les, Matt, Alice, Allen, Jack, And David

Welcome, everybody. It is good to have you with us. It is Monday, August 8th, 2022. It’s amazing how fast this year is going by. I hope you are enjoying your summer. There are many people on vacation. Alice was on vacation. We missed her, but she’s back. We are going to get a legislative update on all the good stuff with her.

Welcome to those of you that are here with us live and to those of you who are going to be reading this while on vacation. I appreciate this being a way in which you stay up on all that’s going on in the crazy mortgage industry. This show is created by mortgage professionals, which would be us, for mortgage professionals, which would be you. We’re grateful to have you as our reader. Our commitment is to bring you timely information that you can read anytime and anywhere.

As for some news, for those of you who are tuning in on Apple, this has been frustrating. We’re working with Apple to get them to connect. We transferred the RSS feed from BlogTalkRadio over to Podetize, and when we did that, the link broke. That updates automatically. Our team at Podetize, which is a firm we’re working with, is scrambling to get that reconnected.

I was checking all the platforms that we’re on. We’re on fourteen platforms that are updating live. We’re on another eleven platforms that are in varying degrees of success. It doesn’t matter which device you come to tune in to us on. You can always go to our website and tune in to us from there. We can be available to you. We’re working on all that. Have patience as we go through this process. It seems like technology can’t live with it and can’t live without it.

I’ll say a special thank you to our sponsors. First is Finastra. Fusion System, their mortgage bot, is a leading point of sale that works closely with the origination platform. There are so many changes going on there at Finastra and they’re continuing to get better. Check them out. Go to Finastra.com. Also, we have FormFree. I love these folks at FormFree. They’re so much fun to work with. They are a leading provider of some of the direct source skill As, which are verification of assets, in terms of the latest data. Check out what FormFree is doing. Read the interview we did with Christy Moss. I love those guys over at FormFree, Brent and the whole team. It’s amazing. June 20, 2022, is when we last had Christy on. It’s not that long ago. Read that interview.

As well as Lender Toolkit, Brent Emler, and Michael Whitbeck with Blueprint. Check out that interview on July 11, 2022. Also, Snapdocs. They do such an amazing job in digitizing the mortgage closing to offer a better experience for you and your closing team, settlement partners, and borrowers. Do it all through Snapdocs. Check out this company. They’re doing some of the most leading-edge things out there. There is them along with SimpleNexus. We had Shane Westra on. Read that interview on June 27, 2022.

SimpleNexus has got it happening. SimpleNexus and Snapdocs are the industry leaders and total experts. They do a great job at that. They’re an advertiser. We’re thrilled for them. They create this total experience platform that unifies the data, marketing, sales, and compliance solutions to provide a cohesive experience across the customer lifecycle. It’s an outstanding platform. Check them out. They can also help you with your recruiting through their CRMs.

Also, thank you to MBA, Lenders One, The Mortgage Collaborative, SuccessKit, as well as Knowledge Coop, Mobility MMI, Modex, Mortgage Advisory Tools, and DW Consulting. Deb Wemyss there helps you with your LinkedIn profile. We’re so grateful to have our regulars with us. We’re grateful to Adam DeSanctis for being here, Les Parker, Matt Graham of MBS Live, who is the amazing producer of some of the greatest data on a real-time basis, Alice Alvey, who is back from vacation, Allen Pollack, who is dialing in with us in a minute, and my co-host, Jack Nunnery. Jack, it is good to have you with us. Let’s get over to the MBA in Mortgage Minute with Adam. Here we go.

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I’m Adam DeSanctis. Welcome to the Mortgage Minute, the latest news from the Mortgage Bankers Association. MBA sent a comprehensive comment letter to the FDIC, Federal Reserve, and the OCC in response to the agency’s notice of proposed rulemaking on Community Reinvestment Act modernization. The nearly 700-page NPR is the first joint agency rulemaking proposing regulatory changes to CRA since 1995.

MBA’s letter noted several top-line issues that would be crucial to improving the current CRA framework by providing greater clarity and consistency in the CRA’s application, addressing changes in the banking industry including the expanded role of mobile and online banking, and creating a consistent regulatory approach that applies to banks regulated by all three agencies. For more on MBA’s letter, please visit the Letters and Testimony page at MBA.org. That’s it for this episode. Thank you for reading.

We appreciate the MBA for the latest news. Register for the annual conference. If you’re not already registered, do so. Many of us are scrambling to try to find Airbnbs and hotels around the area. This is going to be a big conference. There is a lot coming out at this conference, so be sure to get signed up.

Also, sign up for the Mortgage Action Alliance app. They do such an amazing job of helping us get the word out to the hill on important initiatives. Let’s get over to Les Parker with this TM Spotlight and a macro view of the markets. We appreciate you and Gary Catrambone producing these for us each and every week. Without further ado, here’s Les.

Strong jobs and wages scatter the hopeful doves and unite the hawks. Meanwhile, the struggle between slowing growth and surging inflation rages. Wild moves continue, but no surging bull trend. Economic discontent and erasing evidence of mortgage payment boycotts by tens of thousands of homeowners. Add to China’s growth woes. Consumers, borrowers, and financial analysts around the world are baffled and cry for sunshine. These views are my own. Bask in the sunshine of insight at TMSpotlight.com.

One thing we may want to discuss in a future episode is the real estate situation that China’s experiencing with some of the challenges. For example, Evergrande. That’s an interesting story unfolding in China. We don’t always have to learn from our past mistakes. We can learn from other people’s mistakes. That would be something that I’d like to spend some time on in the future.

We don't always have to learn from our past mistakes. We can learn from other people's mistakes. Click To Tweet

Let’s get over to Matt Graham, who’s here with us. Matt Graham is the founder of something we love using. It is the MBSLive.net system. What do you have for us?

It is a wild week. We’re getting a lot of questions on MBS Live about whether this is the biggest volatility we’ve ever seen. The answer to that is no. We’ve seen bigger swings but in the short-term. It does feel pretty intense at times. Let’s talk about the setup. First off, we came into it at the best levels in several months. It is due to the stuff that Les shrewdly alluded to with that dichotomy between slow growth and rising inflation. The slow growth narrative was a force coming into.

Right out of the gate, we had Fed speakers on, particularly Mary Daly, saying that the market was way ahead of itself in anticipating a sharp decline in the pace of the Fed’s rate hike regime. She also said that the Fed’s work on inflation is nowhere near almost done. That is a departure from the takeaway that many people had from Powell’s Press conference.

What a buzz kill her comments were.

In her defense, she did maybe appreciate that her words impacted markets a bit more than she would’ve expected and then came back the next day and tried to offer things that were a little bit more conciliatory. Unfortunately, the next day also brought ISM non-manufacturing or ISM services, which, as far as broad economic indicators go, is a better one than GDP for the most part. It’s more timely. It’s more tradable as far as markets are concerned.

This one was quite strong. Markets looked past the bond-positive aspect of lower inflation. They instead focused on the fact that the business activity portion of the index came in at 59.9. That was versus a median forecast calling for 54.0. If we think about ISM with a baseline of 50 being zero for other oscillating-type reports and we think about, let’s say, an average good pace of growth, let’s use something like non-farm payrolls. An average good case of growth for payrolls would be $200,000 a month historically. We would equate that to 52.0 when it comes to ISM. That means the forecast was effectively calling for what would’ve been, in payroll terms, $400,000 and instead came in at $990,000. That gives you an idea of the sense of the scope of the beat in that data.

59.9 versus 54 doesn’t sound like much, but if you were talking about payrolls at $990,000 versus $40000, that sounds pretty huge. That is the way the market took it. There was an instant and massive reaction in the Fed Fund futures greatly upgrading the view on where the Fed Funds rate would be in the middle of 2023. That was a big mover as far as Fed Fund futures went because heading into the second half of July 2022 or throughout July 2022, we saw a gap between where the market thought the Fed Funds rate would end in 2022 and where it would end up by mid-2023. It showed a quarter of a point and sometimes more than that decline indicating that the Fed would be hiking into the end of 2022 and then cutting at some point.

After that economic data, that gap has closed considerably. They’re seeing the Fed Funds rate staying relatively level into the middle of 2022, at the very least. That’s as far into the future as we have super liquid trading in that market. To add fuel to the fire, you’ve probably heard the news already about Friday’s jobs report, which was stellar. There are some Yaba in that report, but 528,000 versus 250. That is a very big beat. There is wage growth, as Les alluded to. That is a 0.5 versus 0.3 forecast and a 110% upward revision of the previous month.

It’s great economically, but it also increases the risk that inflation can continue to have some legs. That brings us to the week when we have CPI coming out. It will be our first look at a big-ticket inflation index for the month of July 2022. It is expected to decline a little bit at the core level, but expectations don’t matter as much as how we come in versus those expectations. There’s substantial market movement potential from that report and it stands a good chance to set the tone going forward.

It’s 1 of only 2 CPI reports between this and the critically important September Fed meeting. I would look for a lot of volatility. It could thread the needle and we might not see a huge reaction one way or the other, but nobody knows exactly where the eye of that needle is. If it doesn’t thread the needle, then things could get pretty carried away.

It’ll be most interesting. Matt, good job. The data you have on your screen here behind me is amazing with how you put it together and organize it. One person was asking me, “How many TV screens do you have back there? How many monitors do you have back there?” I go, “It’s just one monitor. It’s the magic of Matt.” I refer to it as the Matt Magic. I got Matt Magic going on behind me. It’s the power of the data. Jack, do you have any thoughts and comments you want to add?

Matt can share some of the Matt Magic with Jerome Powell. His job got increasingly difficult when the Fed said, “We want to pause. We want to take a look at the data.” It’ll be data-driven from here out, and then we got the data that we got on Friday with new job formation. As Matt indicated, it is doubling analyst expectations. When is a recession not a recession? When the economy is doing as well at forming jobs and we have record-low unemployment, the focus turns back to inflation. Matt indicated that there is PPI on Thursday and then the University of Michigan consumer sentiment on Friday. This is going to be a busy week. Matt, Jerome would be willing to listen if you got a little magic to share.

I sent him everything I got all the time. I clip out letters from magazines and send them to him like ransom letters. He doesn’t respond.

We need some Matt Magic. This is going to be another volatile week, which is another good point why people need to have a system like MBSLive.net. If you have that, you see what’s going on. You may not like it. Don’t shoot Magic Matt because he brings us the data. So good job.

 

I’m the messenger.

You do a great job. I appreciate you. I appreciate the relationship.

I appreciate you.

Let’s get Alice Alvey on here. Here’s a little-known and less-known fact. Do you know what started the show for me or why I reached out many years ago and started this crazy show? We’re fast screaming towards over 1 million downloads of this show. It blows my mind to see how fast this thing is going and growing. It’s crazy.

I got asked to speak on a topic related to compliance. I stay up on things. I read the industry stuff and all that, but having dyslexia, I like the audio version of listing the things. I searched and could not find any shows that were covering the topic I wanted. I had met Alice Alvey and Jan Wetzel. I met them and they’re my sisters from another mister. They instantly became some of my best friends. I’m so grateful for them.

I said, “Alice, I got this idea of putting together a show. Would you be willing to get on the show with me? This thing is new and exploding.” I felt like I was like trying to explain the internet for the first time. I said, “This could be pretty big.” She agreed to come on. She’s been here. She’s one of the founders of this with me. I am so grateful to have you here. Did you ever think that we’d be screaming for over 1 million downloads of this show when we started this thing many years ago?

I did not think that. I wasn’t sure what was going to happen. We kept meeting Monday after Monday and before you know it, years have gone by. It’s been crazy. I still laugh that I still spend a lot of them sitting in my car because it’s a quiet place and I’m having my lunch. The idea of going video, I’m like, “I won’t be able to eat my lunch sometimes.”

What people love is organic. I do appreciate you so much for believing in it from way back when. We have Alice Alvey, CMB, Vice President of Education and Trading at our beloved Union Home Mortgage. She’s here with the legislative update. I thought everyone would want to enjoy a little bit of that backstory.

Union Home has been very supportive of me. Continuing with this was very valuable for me as an independent business owner for all those years. That was a lot of fun.

It’s not hurting Union Home at all either having you here. That’s for sure.

They’re grateful. With Congress doing all kinds of other things, I wanted to focus on the fact that we’ve gotten memos from each of the agencies. I’ve got a VA, a Fannie, a Freddy, and an FHA memo to get everybody up to speed. Make sure you didn’t miss one or maybe there were some confusing things in it. VA published its circular at the end of July 2022. It came out for publication shortly after that, talking about allowing exterior-only appraisals and desktop appraisals.

They want it to be in a waterfall process. It’s going to start with we should be trying to do a regular interior appraisal if you fall into this bucket of the purchase price does not exceed the current calendar year conforming limit. You’re not going to be doing anything into the jumbo category. It’s for single-family, not manufactured home. The house can’t be undergoing any renovation and have no leaseholds. You’ve got one or both of the following. The veteran’s making a down payment of at least 20%. Right there, I go, “Stop. How many VA loans do you have with that kind of down payment?” It is slim to none.

It could also be that it’s been more than seven days since we requested the appraisal and the case still remains unassigned. It is designed to not only be a little bit of a fast track when we’ve got a nice LTV cushion, if you happen to have that, but more importantly, if you’re finding a delay. There is a process to read through in the circular to make sure you get the steps down. It’ll still be run by VA reassigning the appraisal, but hopefully, get a little bit of relief for some of those late appraisals.

We’ve then got Fannie selling announcement 22-07. This one is offering up lender-funded grants. I was thinking a lot about this, like, “How many independent mortgage bankers might offer up some type of a grant?” When you read something like this, it is a bank product. You’ve got deposits. You want to offer something. You have to pull together a full program. It has to go with the Fannie home ready. Read through the six or so bullets that are on there. Is there a new market out there for small grant amounts of $1,000 or something like that that becomes a marketing angle? Check that one out.

I have a client that is acting on this. They’re putting together their own small grant program and they’re seeing it as a real advantage. I expect it’s a good one. I call attention to that one everywhere.

It is a good one to stretch out on because I thought, “If you were going to offer credits of any kind, was it 6 to 1/2 a dozen to the other to then be able to advertise something new and with a consumer benefit?” Make sure you set up your processes right. This is one that will get audited that you’re managing it correctly and you’re not upping pricing to cover your grant donation. It is in the fine print. There is also the Friday selling guide 22-16, the age-based resale restriction. This is going to be a little bit of in the automated collateral evaluation. That was a nice welcome thing.

 

Also, you can get partial income rep and warrant relief, which is nice. If you’ve got three sources of income, for example, one of them could still get rep and warrant release through LP and maybe the other two don’t, as opposed to a blanket statement that none of them get it. I mentioned this two shows ago that FHA extended their appraisal validity period. That was mortgage letter 22-11. You get a full 180 days on an FHA appraisal and don’t have to fuss with that 30-day extension rule. Read the whole thing for the details. That’s what’s going on in memo land from our agencies. I’ll kick it back to you.

That’s good. What about the CRA thing?

The CRA piece that is in a proposed rule state has minimal impact on minimum mortgage bankers. To the banks and credit unions out there who are subject to CRA, they’ll find some relief. As was reported by the MBA and the intro piece, the MBA is on this one. They do think it’ll be some good changes to make it easier to comply and to be able to pull in more data. That is my understanding. There is more to come as it gets to the comment period. We’ll report back after they respond to comments and we’ll see what the final might look like.

Good job. I appreciate it. Thank you so much for being here for many years, almost every week except for the vacation. You’re even broadcasting from your fishing boat while your husband fishes. I appreciate it so much.

Airport, cabs, you name it. It is wherever we happen to be.

It’s so true. It’s been all over everywhere. Thanks. I appreciate you. Allen Pollack dialed in. He dialed in and then disappeared, but he is back.

Let’s talk about a couple of things. The first one is real estate technology and mortgage technology. There is a serious gap in the middle. I’m going through the process, and many of you reading may be going through the process of buying a home. I got to tell you. I’ve spent a few months prior, before the rates started going up, putting multiple offers on homes. Every single offer I made was low or the lowest. I finally found a property and put an offer in. I’ve been working with my mortgage team. I’ve been working with the real estate team.

At the end of the day, I lost again. I was the only one bidding on this property. Somebody came in on the eleventh hour with an all-cash offer that had seen it only a day ago, but I’ve been going back and forth and trying to get everything worked out. I did a quick inspection because I needed to verify if the roof was going to be insurable and all these other things.

To make a long story short, was is something missing. My mortgage team, I know them very well. If they’re reading, I still love you. There’s a piece. I told them this. The piece missing is that they’re not selling based on product and based on true affordability. They’re selling based on getting the deal in and then figuring it out later. That’s a big mistake because what’s happening is there could have been other products and other ways that I could have been able to put a higher bid in, but I wasn’t able to get to that point where I had the information to make that decision.

The real estate agents and the mortgage folks that use Mortgage Coach, and it’s a shameless plug because I love their technology, are completely different. If you think about something like seller buydowns, you have the ability to use the technology to look at the opportunity. If somebody may not come down and price or cover something, you can negotiate a way for them to put a seller buydown into your closing costs, which would fly down your rate. That is especially in the first year, more than the second year, and then finally fully amortized or fully normal in the third year.

Where I’m going is there’s something missing in the middle. It is the ability to walk into a property and know all your options. It is the ability to know your options throughout the process without having to talk to somebody. You don’t want to feel like you’re going to a car dealer where every time you talk and negotiate a price, they have to go to the pricing desk and come back to you and talk to you again.

I want to mention the folks out there that are thinking about the single vendor or best of breed. You also said that with counterparty risk. That’s important as you think about this and think about how you’re serving your customers. If you’re a financial institution, you want to hold their hand. You’d prefer to go with them to the open house if you could. If you’re not a financial institution or you do a high volume, you’re a financial institution, then you’re on the other side of the fence. What is that gap in the middle?

Total Expert did an article with National Mortgage News or HousingWire about something missing. I experienced it myself with something missing. I do truly think that we’re waiting for some innovation to occur. Everyone’s got a point of sale or everyone’s going to have a point of sale. Everybody’s going to have feet on the street. What is it in the middle? Is it CRM doing drip campaigns in that technology and you’re integrated with text messaging? Is it technology where you walk into a property and by using location, you immediately have 30 different ways to look at that loan as you’re walking through that property? You can make an educated decision and beat the next person who’s about to place that all-cash offer that I experienced for the fifth time.

I leave that to all the technology minds reading. There are some connections missing in the middle. There’s financial literacy or mortgage literacy, let’s call it. It’s not so much how to use the technology. It’s what to do with technology. With digital Mortgage, where it comes down to, because that’s what we’re all thinking, is tying up. Alice, you were on the boat with your husband. I was on my boat. There are 100 ways to tie a knot. It’s so funny to watch someone come on your boat when you pull up to a dock and you watch them try and tie it off. They think they know and do it all different ways.

It's not so much about how to use the technology but what to do with the technology. Click To Tweet

They may wrap it around 90 times and hope the wind doesn’t untie it 90 times. Ultimately, there are 100 ways to do it. What is the 101st way that you’re going to devise your technology? It comes down to what you said, which is the single vendor or best of breed. It’s not just about technology. If you’re thinking about what to do with that single vendor or that best of breed, there are three very quick points I want to bring up and I’ll open for discussion.

The first one is what is your fit or your purpose? What is the strategy? Maybe you’ve got so many applications coming in and you’re so good at the marketing that you’re good with that and you don’t have an issue. Maybe it’s the complete opposite. What is that strategy? The second is to adopt a planning and vendor selection approach that goes beyond the usual means. Don’t grab whatever vendor everybody’s talking about or you see listed with a press release in HousingWire. What that means is to make sure you understand what that vendor offers and how it affects all the other components of your overall strategy.

You may need somebody. There are consultants. David Lykken and the team does this. There are other folks out there. Ultimately, you have to understand what it is that you have. Finally, the last thing is to implement all that using a value assurance approach to make sure that you’re implementing things with the right priority and that is valuable to your return on investment. The last comment I’ll make is, are you on a fixed or variable cost? You have control over that. Tech’s a big deal. There’s a lot going on. Think about that as you do your modernization. Develop your fit or purpose strategy.

You bring up a great point. Variable cost is one of the things that everyone should be shooting to. You say you have control of this. I would say, when it comes to some of the major LOS, “Do I have control over this??” How can we get to a variable cost once every vendor needs to know, “I’m going to have this much minimum coming in.” If you only do that minimum, then you’re going to be paying more, but then you want the discount when the volume goes up. Do we have the flexibility on that?

Yeah. Everybody has flexibility. It’s a matter of having the right people in your organization that understand what you’re doing and sticking with a strategy. If you say there’s one thing you want to do and it costs you X, but your vendor tells you, “You can’t do that,” there’s a gap in the middle. How do you bridge that gap? Maybe they’re not the best vendor for you or maybe there’s an adjustment you need to make somewhere else. Sometimes, you give up something to get something, so what would you give up? What would you get somewhere else to make a different change? I do think that we, as lenders, are in complete control over the situation. It’s a matter of spending time and having the right people.

Jack, do you have any commentary?

I’ve got a lot of thoughts about the vendor management. First of all, to our readers, this is the time to take a hard look at your tech stack. Nobody wants to implement technology when we’re in a $4 trillion mortgage origination year. When volume is slowed down, it reduces the inherent risk to implementation. This a good time. As you look at the vendors that you may want to partner with, you need to think about the resiliency of the vendor and what’s been their uptime rate. Something that a lot of people don’t put a whole lot of thought into is whether or not this is a vendor that breeds vendor dependency.

What can you do on your own as opposed to having the vendor do it? There’s the cost to the software and implementing the software. There’s also the ongoing cost that every time you want to add a field to a report or you want to make a change in configuration, those costs will add up. There are a couple of vendors out in the space that is very notorious for making that painfully expensive for you to do. That’s one of those hidden costs when you’re going through your vendor review.

You’re thinking about your license, transaction, or implementation costs, but you need to look down the road because the mortgage business changes daily. There are some new rules, some new legislation, or some new memorandum. You pick the GSE. You pick the agency. You have to go back to your vendor to build that change.

Is there a rules engine user-friendly enough that you feel comfortable with a competent BA and testing around the change? That’s something you can do in-house. I have a couple of thoughts there that it’s not just about seat license costs, transaction costs, and implementation costs. There’s an ongoing cost to technology. Make sure you have that as part of your cost analysis.

 

Alice, do you have any thoughts on this topic?

Allen said something even earlier in his comments before the vendor piece. I’m sorry if I’m going to hurt everybody’s brain by pivoting back to that. It was about the transaction itself that he was shopping and wanted to know his options earlier and how we get there. He brought up the 2-1 buydown. This is an old-school product. I still don’t see seller contributions being strong enough to pay for closing costs and a buydown. When we get to that level in the market, then it’s interesting. There is a lot of talk about the buydowns. Some are finding that they’ve got the funds there to pull it off. It’s interesting how old becomes new again. You dig that back up again. The loan officers have got to be armed for transaction options, property approval, and buyer approval.

It’s interesting. My mortgage company did not bring that up, but being in the industry, like all of us, I know about it. I was using it as leverage because the homeowner wanted to not have to pay for the roof. I got a price on the roof, but my turn on the negotiation was, “I’ll pay for the roof but you’re going to contribute to buying down my rate.” My real estate agent said that was a great idea, but someone came in with a full cash offer.

A permanent buydown is nice.

David, if I could jump in on what Jack said?

Yes.

Jack, you mentioned the resiliency of vendors. That is huge. I’m almost upset that I didn’t even bring that up. Thank you for mentioning that. It’s not just the resiliency. You and I had talked about this in the past when we did work together. It’s not about what are the hidden costs and how you manage that vendor, but what is your risk of that vendor going to a business or not being able to support the changes you need. Do you need to have another vendor in your back pocket? That is a discussion for a different day, but I appreciate you bringing that up.

Matt Graham, we got to get you in on the discussion. Usually, you drop and run away because you got to chase the markets and send up more updates, but you’re still here, so we’re going to bring you in on the discussion.

It’s partly an accident because I am working as I listen. I haven’t caught everything, but it sounds like Allen was sad because he didn’t get the deal he was trying to close.

He got beat out by another cash offer and he had done so many efforts to make sure that he didn’t have that as a potential risk. That is so frustrating.

I don’t know why they don’t do it like eBay. You have all this opacity. My wife and I were going through the same thing a couple of months ago. We were wondering, “If we’re going to make the opera we want to make, are we throwing away an extra $100,000 to come up to what we think this is going to go for?” I would much rather know the other party’s bottom line. That’s a good place where the MLS and realtors could drive some innovation. It could increase froth at times when things are frothy. It’s a tangent to what you were saying. I don’t have any crazy thoughts on what you guys were talking about in general with the bidding process.

The whole bidding process is one of those ones. This is where the difference in not the company you’re working with but the mortgage LO that you’re working with. That’s why business owners and MLOs that are reading this, what are you doing to keep your people updated on all the options they have? Allen, you gave our good mutual friend Dave Savage and company, Mortgage Coach, a good shout-out. They do a great job of making everyone aware of that. He’s got a great podcast, too. I encourage you to go tune in to Mortgage Coach. It’s all good stuff.

It’s important that we are keeping everyone aware of what tools. As Alice said, we’re hearing about “new tools.” You go, “That’s not so new. We used that about 20 years ago, 10 years ago, or whatever it was.” We have enough people in there where they’re going, “That sounds new for realtors and everything else.” That is important. You’ve got some of that going on. One of the things I love about your system at MBS Live is they’re helping each other. Loan officers are helping each other on your system hosting scenario deals. That’s another big advantage of using MBS Live.

There has been a ton of talk on 2-1 buydowns and all the rest of it, more than I’ve ever seen in the past couple of years. The same response that Alice gave is the general response from the most experienced people, which is, “A) That’s not new. B) It doesn’t make a lot of sense.”

Sometimes, it’s that differentiator. When it comes to differentiating yourself, you have every tool. It may be an old tool that you dust off, take the rust off of it, repackage, or even give a new name.

I know it goes without saying for a lot of people in sales-oriented industries, but be aware of what your competition is doing. That landscape has changed so drastically with respect to rate quotes during this time when MBS coupons are compressed. People are aghast, wondering, “How in the world can so and so quote 4.625%?” They got a discount point in there. If you’re not quoting that way, you might not know how much your point buys because it is, in some cases, more than half a percent in interest.

For many people in sales-oriented industries, be aware of what your competition is doing. Click To Tweet

A lot of people are using those quotes to get the business in the door and then presenting that option alongside other options. That loan ended up closing at 5.8% as opposed to 4.58%. The person who lost the deal is thinking, “Such and such lenders are quoting 4.625%. It’s not realistic.” That’s what they use to get the person in the door in some cases.

That’s why I love your service. It’s one of the many values of your system up there because you listen to people chatting and how they’re structuring deals with each other. It’s a community. They work well together. This is so exciting. We’re getting text messages from a number of you saying, “This format of your new show where you sit, talk about each of these issues, and let us read organically is so valuable.” Thank you. We are getting a lot of feedback on this.

We’re going to be adding other topics. Reach out to Marc Helman. I’ll try to get Marc in here to start talking about servicing and agency approvals. There are some things going on there. We’re going to continue to expand the depth and breadth of this show. Let’s watch us rocket up over 1 million downloads soon.

It’s so good to have you all with us. This is the time for innovation. That’s why tuning in to this show and listening to my good friend Dave Savage’s Mortgage Coach, there are lots of opportunities, but what are you doing? Are you sitting there agreeing with everyone that there’s nothing to do, or are you getting on, educating yourself, and giving yourself the advantage? Share this show with others. We are here to help you. Sign up for MBS Live and watch others talk about it every single minute of every single day on that channel. It is one of the more valuable features of that thing. It is so good to have you all. Alice, do you have anything you want to share as we wrap it up?

No. Thanks, everybody, for your thoughts. This is fun getting back to sharing thoughts and ideas that hopefully people can take away some value with.

Allen?

I agree. With the audience, that’s great to get some discussion going. Your feedback to us is also great. Thank you for tuning in.

We appreciate you being here, Allen. I’m so sorry you lost that house again. I know that’s got to be so frustrating, but at least some more homes are coming on the market. With the rates up a little bit, we’re going to see a little bit of a slowdown, maybe or maybe not. That is it. We’re going to call it a wrap on this. Thank you so much for your feedback.

For those tuning in by Apple, we’re going to get this fixed so you can get all the downloads on that. We’re working on it to get that thing solved. It’s interesting how popular the Apple Podcasts app is and how many we have tuning in via that. We’ve got to get that fixed. It’s good to have you with us. Have a great week, everyone. We look forward to having you back here.

 

Important Links

• Apple – Lykken on Lending
• FormFree
• Finastra.com
• Christy Moss – Hot Topic: Freddie Mac Aim for Income Using Direct Deposit & RVOE
• Lender Toolkit
• Blueprint
• Interview – Hot Topic: Digital Transformation: Generating an Upfront Verified Approval
• Snapdocs
• SimpleNexus
• Shane Westra – Hot Topic: eClose Innovation
• MBA
• Lenders One
• The Mortgage Collaborative
• SuccessKit
• Knowledge Coop
• Mobility MMI
• Modex
• Mortgage Advisory Tools
• DW Consulting
• Les Parker
• MBS Live
• Alice Alvey
• Allen Pollack
• Page – All Letters and Testimony
• Mortgage Action Alliance
• Mortgage Coach
• Mortgage Coach – YouTube

 

About Adam DeSanctis

Vice President of Communications at Mortgage Bankers Association

 

 

 

About Les Parker

Making individual lives better drives me. By transforming consumer lending across the globe through transparency, quality, and connectivity investors invest with confidence, which ultimately gives individuals the confidence to borrow safely and understandably. RegTech clarifies FinTech.

 

About Alice Alvey

The front line is where the action is and where training efforts can be measured. I am excited to be working with a great team of partners at Union Home Mortgage to develop their training program across sales and operations. The industry is moving rapidly to embrace new technology that constantly changes the way we operate. This in turn changes what, when, why and how we must learn the new ways of business. Education methods and content must change just as fast to keep the team ahead of the curve, efficient and deliver world class service.