THIS MORNINGS QUICK LOOK
- TOUR DE MTG FINANCE – Where is the bottom?
- PRODUCT HIGHLIGHT – Lender Pd Vs Borrower Pd
- MARKETING – Story Vs Advertisement
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WHERE IS THE BOTTOM?
I listen to multiple people about MBS so that you do not have to.
One of the common themes discussed is when will we hit bottom as far as rates go.
Of course, nobody has the crystal ball and every time we have a glimmer of hope someone does something causing turmoil.
One of the folks I listen to spoke yesterday on when will we hit bottom and WHY will we hit it?
The answer to why is because we have to. The same as the Fed has to slow down inflation with their rate hikes they must slow down the rate increases.
700 bps in 5 months is not something that can continue to happen. How they fix that who knows? The main process is to either slow down or not write off their balance sheet of MBS investments.
Why does that help? It helps because it creates false demand for MBS causing rates to stop or get better but then that hampers inflation.
The issue is if housing gets much more unaffordable you have heard the term too big too fail well that is our housing industry and the millions of jobs tied to it, The supply that every new house construction provides for and the families and businesses that pay taxes are in the housing business.
Why do we need to hit a bottom soon? Because the Fed cannot afford for us not to.
We will see what the future brings but we are teeter tottering on the 4% coupon at 100.03 so 3 bps in margin which means we are really at the 4.5% coupon.
Yesterday was the most balanced day in trading I have seen in a while. A 5 bps increase in MBS. It was actually kind of nice. Same rate for lenders all day long. King of a crazy thought huh.
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LOCKING BORR PD VS LENDER PD
TRID has been around since 2015 with borrower paid and lender paid comps.
I receive questions multiple times per day on how to do borrower paid. Lender paid has become such a part of the broker model that many originators either have never done borrower paid or borrowers have become so accustomed to no origination fees.
Unfortunately, the times are changing and lender paid is not and cannot be the only option.
The main reason is you are doing lower score loans and tougher loans and manual underwrites as well as no score loans on our govt products if one borrower has a score.
These are causing large loan level price adjustments and with all of the hits we are not getting enough in premium to cover all of the adverse hits hence borrower paid is becoming much more popular.
A couple items to know. You can swap back and forth from lender paid to borrower paid as much as you want UNTIL you lock the loan. Once locked you are all in. Zero changes including reducing fees.
Also, PLEASE look at the pricing matrix and do not assume lender paid is the best option. I have seen where a borrower can go borrower paid and save almost 1 1/2% on their mortgage rate if they pay your fee upfront.
Give your borrowers the options. Let them decide. You are their loan officer and not their mother or father.
Lastly, your borrower paid must be a minimum of 1 bps less than your lender pd. If you are at 275 bps lender pd borrower pd must be 274 bps or less.
Marketing Ideas And Opportunites Little Things That Can Make A Big Impact
STORY VS ADVERTISEMENT
If you use facebook for advertising and you are trying to get business and you put a great little picture you designed and has great intel and all the great things you can do and you post it then you get 1 like and no comments.
Yet, when you post about the cheeseburger salad you made and got together with your long lost maid of honor from 23 years ago you get 193 likes and 83 comments.
You have two issues here. #1 is facebook algorithms knows when you are advertising. I think they can tell the makeup of an advertising pic and how it is different from a picture of your cheeseburger salad.
Any conflict with you paying for leads to them will have heavily reduced viewing.
#2 – Your cheeseburger salad does not drive in mortgage business so it is great you get likes and comments but it does not help your business.
The number of people that comment on your posts is what gets facebook to show your posts to more of your friends. Multiple other reasons why but the same as google is based on hits so is facebook. Not necessarily likes near as much as comments.
Facebook wants good interactions without losing advertising money.
So, one of the keys is to continue your story but always make sure you mention what you do as a reminder to those that comment.
For example, “Whew folks, after a crazy day in the mortgage business I got together with my long lost maid of honor and we had a few cocktails and ended up making cheeseburger salad and this was the end result”.
This is where your story that gets comments is also getting a reminder that you are in mortgages.
Just a thought……………….
Turn Times As Of This Morning Lookin Good!
| TURN TIMES | Purchase | Refinance |
| Business days | business days | |
| Conv Non-MI | 1 | 1 |
| Conv MI | 1 | 1 |
| FHA/VA | 1 | 1 |
| USDA | 1 | 1 |
| Jumbo | 1 | 1 |
| Conditions | 1 | 1 |
