Vaultedge Newsletter - Memorial Day, low delinquencies & data breach!

May 30, 2022

Memorial Day as far as I can remember has always been perceived to be a long weekend celebration with barbeques, beers, get-togethers. In 2000, Congress established a National Moment of Remembrance, which asks Americans to pause for one minute at 3 p.m. local time in an act of national unity. The time was chosen because 3 p.m. "is the time when most Americans are enjoying their freedoms on the national holiday." We often take our freedom for granted, and I feel there is no harm in enjoying the holiday. But, we need to pause, recollect, and understand the true essence of being free. This year take time out to honor the fallen through a prayer, moment of silence, flying the flag, attending a ceremony , or other meaningful reflection. Happy Memorial Day!

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The 3rd Annual Non-QM Forum is back! Given the state of non-QM loans right now, this couldn’t have been at a better time. A few months ago, Tom Hutchens, the executive vice president of production at Angel Oak Mortgage Solutions had stated that the non-QM market in the US could grow to as much as $100 billion in 2022, amounting to a four-fold surge over 2021 and reflecting the growing importance of the loan product to the sector. With a shift in the market, there has been a substantial increase in the non-QM market from the traditional lenders and brokers. The Non-QM event is lined up with exciting sessions hosted by the industry stalwarts. We have prepared a list of the top sessions that we feel shouldn’t be missed. Our AUS product extracts and analyzes income data against underwriting guidelines from different investors to qualify borrowers for the best non-QM product. Come and meet us there for a quick chat or a cup of coffee!

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Mortgage bankers only made five basis points on each loan originated in the fourth quarter, preliminary data from the MBA showed, as the cost to produce reached an all-time high. Mike Fratantoni, Chief Economist, MBA said during the group's Secondary and Capital Markets Conference, that the situation is extremely challenging and similar to what had transpired in 2018. Fratantoni along with Seth Carpenter, Chief Global Economist, Morgan Stanley had shared their opinions about the current economic state of affairs and the impact on the housing and mortgage industry. We have drafted a report highlighting the primary takeaways from a few selected sessions held at the recently concluded MBA Secondary & Capital Markets Conference & Expo. The report is detailed enough to showcase the key snippets at the event and concise enough to keep boredom at bay 😊

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Fannie Mae economists talked to 188 lenders of all sizes and types. 94% said these efforts to modernize the appraisal process are valuable. When technology is seeping into every nook of our ecosystem, why should the appraisal process be left far behind? Lenders attempting to identify back-end inadequacies that can be addressed with technology usually start with the appraisal process, as the challenges surrounding it make it hard to be ignored. The traditional appraisal process is extremely manual, time-consuming, and labor-intensive, providing ample scope for improvement. If not managed properly, this appraisal process can delay closings, frustrate borrowers, and kill deals. However, the right appraisal management technology can deliver remarkable ROI. We have always rooted for technology. I mean we are a software company afterall! The kind of innovative products that we have designed try to provide an opportunity for mortgage lenders, servicers, and investors to throw tedious tasks out of their worklists and pave a path for a positive ROI.

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We are all set for the non-QM forum next week. Looking forward to meeting the industry’s bigwigs, peers, and a few competitors to learn and share experiences, lessons, and market trends. My week was immensely busy preparing for the forum. And also helping a few clients understand how our Vaultedge Income Analyzer works. It automatically analyzes income for W2 and self-employed borrowers obtained from various data sources.

How about yours?

Happy reading!  

When United Wholesale Mortgage, the Big Kahuna of originations, decided early this year that it was pushing forward into the Non-QM lending market, it was the biggest single indicator yet that lenders and LOs are looking to non-traditional mortgages to make up for a huge decline in traditional volume.

Wells Fargo is in the news again. This time for firing dozens of mortgage mortgage officers final week after investigations discovered they made allegedly improper adjustments to mortgage information.

Rates continue to be elevated above the familiar days when they hovered around 3 percent.

While the number of loans with payments that have been late for three months or more has fallen, it’s still higher than in early 2020, according to Black Knight.

Pingora Loan Servicing still hasn’t disclosed the full scope of last fall’s hack impacting at least 169,000 customers across four states.

A Fannie Mae survey showed 94% of the 188 lenders asked feel that efforts by the GSEs to modernize appraisals are valuable.