May the 4th be with you! Without the lisp, there are many forces tugging at lenders and vendors. Forget 2020 and 2021. Recruiters are asking LOs what their numbers were in 2018 and 2019. Prequals are running amok, and with them costs for any vendor services like credit verification. The Mortgage Bankers Association’s Marina Walsh tells us that the cost per loan has gone up six quarters in a row, despite all the “cost saving” automation. Meanwhile, in the secondary markets, life isn’t much better… and what happens there directly impacts rate sheet pricing for borrowers. Liquidity in higher coupon securities backed by mortgages (MBS) has been poor to say the least with very wide bid/offers or simply no price discovery. As a result, some higher rate combinations may simply not be available yet. (Keep in mind that any rate over 6.125% would have to be delivered into a UM30 5.5, which are not yet trading in any material amount.) So LOs looking for premium
Change is mandatory. Progress is optional. Are signing bonuses a sign of progress? Perhaps not, and more a continued sign of the competitive times. “A $1 Million Salesperson Signing Bonus is Not a Growth Strategy” is worth a skim. Today’s podcast interview is with me discussing the current rough environment, and as our brethren trail off home from the Texas MBA to the airport in Austin (and actually recognize each other without masks), the talk is about volume and cutbacks. Vendors are being beaten up on price. Long, long gone are the days of padding margins to slow things down as mortgage applications tumble week after week. Refinance volumes have fallen dramatically and are now heavily skewed toward cash-out transactions. Lenders also continue to indicate margins have been cut as much as possible, forcing reductions in capacity to try and control costs as volumes fall. Mid-level management is threatened (do you need district, regional, and divisional managers?) P
One conversation topic not in the hallways here at the MBA’s Independent Mortgage Banker Conference in Tennessee is the death of the original voice of Charlie Brown. The huge cost of health care is, however, and lenders can lower costs by negotiating. “Votre grand-mère donne de superbes massages!” Are things like free daily commentaries with French words, of a higher quality than those that don’t have them? I ask because the Econo Lodge here in Nashville (where free commentary writers bunk down) has some French phrasing on the plastic shampoo bottle, which is ironic because throughout history the French (veuillez m'excuser) were never known for their personal hygiene. One of the topics here is “marketing spend.” Lenders and vendors are acutely aware of marketing, its cost, and its compliance. Are you hearing about lenders or MLOs paying for the auto leases of their real estate agent’s cars? Or all the house photos for
As I head to Northern California, and mourning the loss of Meatloaf, I’m thinking, “Dang. I guess that I shouldn’t have put my entire 401(k) into Peloton stock a year ago,” a great combination of home exercise and technology. Brad Paisley sang, “…And I'd have given anything to have my own PacMan game at home. I used to have to get a ride down to the arcade, now I've got it on my phone.” Mortgage loan originators can’t do anything about interest rates, but they can do something about their service & technology they use. Technology is roaring ahead, whether you’re on board or not, and it is certainly roaring ahead in other, non-mortgage areas. Do you have your digital driver’s license? Using your face for a boarding pass? Try The Frostbite Alert Coat. The faux fur-lined coat has a patch on it that tells you when temperatures are too dangerous for your pet so you can prove to them it'